"SEC Proposes Private Fund Systemic Risk Reporting Rule" for "Liquidity Funds"
"SEC Proposes Private Fund Systemic Risk Reporting Rule" says a release posted Tuesday on the U.S. Securities & Exchange Commission's website. While no word yet on whether money market funds may be involved in the new Federal Stability Oversight Council's determination of non-bank companies as systematically important, this release takes the first shot at "liquidity funds" or "unregistered money market funds". It says, "The Securities and Exchange Commission today proposed a rule to require advisers to hedge funds and other private funds to report information for use by the Financial Stability Oversight Council (FSOC) in monitoring risk to the U.S. financial system. The proposed rule would implement Sections 404 and 406 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The proposal creates a new reporting form (Form PF) to be filed periodically by SEC-registered investment advisers who manage one or more private funds. Information reported on Form PF would remain confidential.... Under the proposal, larger private fund advisers managing hedge funds, "liquidity funds" (i.e., unregistered money market funds), and private equity funds would be subject to heightened reporting requirements. Large private fund advisers would include any adviser with $1 billion or more in hedge fund, liquidity fund, or private equity fund assets under management. All other private fund advisers would be regarded as smaller private fund advisers and would not be subject to the heightened reporting requirements." The SEC explains, "Large liquidity fund advisers would provide information on the types of assets in each of their liquidity fund's portfolios, certain information relevant to the risk profile of the fund, and the extent to which the fund has a policy of complying with all or aspects of the Investment Company Act's principal rule concerning registered money market funds (Rule 2a-7)."
