SEC chair says hedge funds may have to submit less data

by Lydia Beyoud

US Securities and Exchange Commission Chairman Paul Atkins said Wednesday that he wants agency staff to consider narrowing the scope of data that private fund advisers would have to provide the regulator under upcoming rules. 

Atkins also announced that the deadline for complying with the new data reporting requirements would be delayed to Oct. 1 from June 12. But more limited data collection could be a bigger win for hedge funds and private equity firms.

Private fund advisers pointed to challenges, including technical ones, in meeting this week’s deadline. Many funds would have had more than two months before they actually would have had to start filing the new data, SEC staff said during Wednesday’s commission meeting. 

Atkins said he had concerns about whether the government’s use of the data “justifies the massive burdens it imposes.” He has asked staff to undertake a “comprehensive review” of the data-collection requirements added under former SEC Chair Gary Gensler.

The changes to what’s known as Form PF include current event reporting for counterparty risk exposure, major margin calls and investment performance by strategy. Trade groups like the Managed Funds Association had asked the SEC in May to rescind the new reporting requirements. 

Caroline Crenshaw, the sole Democrat remaining at the current four-member commission, said the SEC’s delay was a tricky way of allowing the agency to revisit or abandon disclosures that would give the commission greater insight into financial stability risks that might come from private funds. 

“We are willfully blindfolding the commission” during a major policy push to open private equity and other private markets to retail investors, she said. 

The two-member Commodity Futures Trading Commission also voted after the SEC’s meeting to extend the deadline. 

In a statement, Democratic Commissioner Kristin Johnson said she had “grave concerns” about providing additional delays but voted for an extension “to demonstrate the strength and value” of bipartisan commissions.

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