As required by Title IV of the Dodd-Frank Act (see FSM Report HEDGE56), the SEC today unanimously approved a final rule on what it hopes will prove to be a joint SEC/CFTC form to collect data from private fund advisers. A critical unresolved issue is the status of the CFTC’s version of these forms which, when proposed, differed in significant respects from the SEC’s proposal and, thus, raised serious concerns about burden, conflict and duplication in the industry. The forms themselves are very substantive because they will guide the SEC and CFTC not just to which funds may warrant systemic regulation – a major strategic event, of course – but also to an array of supervisory issues not now routinely evident to these agencies. The SEC’s final rule seeks to reassure advisers about the confidentiality of these data, but this is likely to be a remaining industry concern. The rule is also phased in and reports grow in size and complexity based on the affected fund, although advisers will counter that these thresholds remain well below the size at which a private fund in fact poses potential systemic risk. This report analyzes today’s SEC meeting; an in-depth report will shortly provide clients with a detailed analysis of the impact of the new SEC and CFTC forms.
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