<p>The US Commodity Futures Trading Commission (CFTC) and the <a href="https://www.financemagnates.com/cryptocurrency/us-sec-charges-4-co-founders-7-others-in-cross-country-300m-crypto-scheme/" target="_blank">Securities and Exchange Commission</a> (SEC) voted in favour of amendments to Form Private Fund (Form PF), which is required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010).</p><p>Form PF was created following the 2008 financial crisis. It is a confidential filing of assets under management to the Financial Stability Oversight Council. Private fund advisors (such as hedge funds) that have at least $150 million in fund assets must file the form.</p><p>Under the new amendments, hedge funds that have at least $500 million in assets must report their cryptocurrency exposure via Form PF. The report must also include borrowing and counterparty exposure, turnover, portfolio <a href="https://www.financemagnates.com/terms/l/liquidity/" target="_blank" id="47c3bef3-27ee-4953-8504-159e1b829b33_1" class="terms__main-term">liquidity</a>, financial liquidity, withdrawal and redemption rights and inflows/outflows.</p><p><a href="https://www.sec.gov/files/ia-6083-fact-sheet-0.pdf" target="_blank" rel="nofollow">SEC proposed amendments</a></p><p>As opposed to requiring to file the form on a quarterly basis or annually, material events (should they occur) must be reported within 1 business day.</p><p>The SEC Chair, Gary Gensler said the amendments will better protect investors. “In the decade since the SEC and <a href="https://www.financemagnates.com/terms/c/cftc/" target="_blank" id="b5ae3af7-f418-4c65-9082-0c34b44bd668_2" class="terms__secondary-term">CFTC</a> jointly adopted Form PF, regulators have gained vital insight with respect to private funds.</p><p>"Since then, though, the private fund industry has grown in gross asset value by nearly 150 percent and evolved in terms of its business practices, complexity and investment strategies.</p><p>“I am pleased to support the proposal because, if adopted, it would improve the quality of the information we receive from all Form PF filers, with a particular focus on large hedge fund advisers. That will help protect investors and maintain fair, orderly and efficient markets.”</p><p>Since 2008, the number of private funds has increased substantially. At the beginning of 2022, there were approximately 3,800 hedge funds in the United States.</p><p>Room for Concern?</p><p>Although the amendments may allow US regulators to swiftly identify private funds that are facing difficulties, as greater information is being reported, the number of investigations may increase.</p><p>When a regulator launches a probe, investors will not remain silent. Some are expecting private funds to retaliate against the proposed reporting.</p><p>Furthermore, the SEC proposed the number of treasury trading platforms under the Fair Access Rule should be increased.</p>
This article was written by Matti Williamson at www.financemagnates.com.
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