CNBC – The Obama administration has sent legislation to Congress that would bring hedge funds and other private pools of capital under government supervision.

The proposal calls for the Securities and Exchange Commission to oversee hedge, private equity and venture capital funds. By registering with the SEC, their books would be open to federal inspection and they would be subject to disclosure requirements to investors and creditors.

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Bloomberg – Hedge funds and other investors who short-sell shares in Britain’s financial companies must continue to disclose their trades, the U.K.’s financial regulator said.

A reporting requirement put in place by the Financial Services Authority in January will continue until new short- selling rules come into place, the agency said in a statement today. The requirement had been due to lapse on June 30. The new set of rules is expected to come into force in 2010.

“Keeping the disclosure requirements will continue to enhance transparency and limit the potential for market abuse, while details of a long-term regime for short-selling are being drawn up,” said Sally Dewar, the FSA’s managing director of wholesale and markets.

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New York (HedgeCo.Net) – Australian regulators have extended the ban on short-selling, saying the move was in the “national interest” of the country.

As large national banks prepare to release their profits in the wake of more write-downs and rising debt, regulators wanted to avoid the effects that short-selling by aggressive hedge funds would have on the market.  

"We welcome any additional steps that further boost stability in these difficult conditions," said Senator Nick Sherry. "This is a decision made firmly in the national interest and regardless of any sectoral interests."

The Alternative Investment Management Association was disappointed with the decision, saying the ban reduces liquidity in the market.  Both the Federal Government and the Australian Bankers Association agreed with the extension of the ban, while others disagree with the reasons outlined by the regulators.   

The Australian Securities and Investment Commission said they would “not hesitate to act” should it be discovered that individuals or companies were skirting the ban.

The ASIC originally enacted the ban last September amidst the market collapse and crumbling financial institutions.  The United States and Great Britain enacted bans on short-selling as well, which were lifted shortly thereafter.  

The Australian government said they are hoping to lift the ban eventually, after the completion of their new short-selling disclosure requirements.  

Julie Scuderi
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