Watered down SEC rules shield $22B+ of hedge fund assets from scrutiny

By Rob Copeland

Fri Oct 28, 2011

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HFI data show many small-and-midsized firms will escape the most stringent requirements.


Tens of billions of dollars1 worth of hedge fund positions will remain opaque under new guidelines issued by the U.S. Securities and Exchange Commission, according to Hedge Fund Intelligence data.

New rules approved Wednesday offer a break to some small-and-midsized firms anxiously anticipating the onset of new registration requirements in 2012. Taking a softer stance than regulations first proposed in January, the SEC approved rules that order only firms with $1.5 billion or more in hedge fund assets to disclose detailed positional information to regulators each quarter through Form PF (for "private fund"). Firms managing between $150 million and $1.5 billion will have to file the disclosures only once per year, and those below the bottom boundary are not required to report at all.

The most stringent rules, which are designed to allow regulators to monitor systemic risk posed by private funds, were originally intended to apply...

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