SEC Proposes New Hedge Fund Rules

In an effort to implement provisions of the Dodd-Frank Act, the Securities and Exchange Commission has proposed new registration rules for hedge funds and other private funds. The New York Times reports that registration requirements won’t apply to hedge funds and venture capital funds managing under $150 million, although those firms will have to complete some paperwork and their books will be subject to SEC inspection. The SEC is accepting public comment for 45 days, after which time the Commission will hold a final vote.



Switzerland Considers Greater Investor Protections

According to Bloomberg, the Swiss oversight agency Fimma (Financial Market Supervisory Authority) is accepting public comment on proposed regulations relating to investor protection. In its recent report, Fimma recommended that those selling financial products provide potential investors with prospectuses that include information on risk, as well as the outlook for profit and loss. Fimma also recommended appointing an independent ombudsman and random testing of financial companies.

Senate Committee Passes Dodd Bill

The sweeping financial regulation legislation introduced by Senator Christopher Dodd (D-CT) cleared its first hurdle last Monday, passing out of the Senate Banking Committee. With provisions that include consumer protections overseen by the Federal Reserve, regulation of derivative products, a mechanism for systemic financial risk assessment, and providing officials with the power to seize “too big to fail” firms on the brink of collapse, the legislation has been heralded as the biggest financial regulatory overhaul since the Great Depression. As reported by the Washington Post, while the Committee voted along party lines, the bill will likely incorporate a number of Republican modifications prior to a vote of the full Senate.



Bipartisan Financial Reform Fails

Intense negotiations between Senate Democrats and Republicans regarding financial reform have seemingly been for naught, resulting in Senate Banking Committee Chairman Chris Dodd’s (D-CT) announcement that he will introduce his own bill for regulatory overhaul. According to the Los Angeles Times, the sticking points apparently centered on the creation of a new consumer protection agency, and whether the U.S. Treasury or the Federal Reserve would oversee such an agency. Dodd has indicated that his bill will incorporate many of the provisions advocated by Republicans, and that the bill will be considered by the Committee the week of March 22.



Council of Regulators Likely to Oversee Bank Risk

Amidst the plethora of banking reforms proposed in response to the economic crisis, a major point of contention has been the question of who should be in charge of oversight. Some members of Congress have sought to rein in the power of the Federal Reserve, while others favored giving the central bank oversight responsibilities. According to the New York Times, now it looks as though Congress and the Obama administration are on the verge of agreeing to form a council of regulators, led by the U.S. Treasury, to detect and mitigate excess risk and systemic instability. The proposed council would be chaired by the Treasury Secretary, while the Fed Chairman would act as vice-chair.