Reuters- Hedge funds are flouting one of the few U.S. disclosure regulations applying to them. But instead of punishing them, the U.S. Securities and Exchange Commission may scrap one of the rules to make it more palatable for the funds, according to SEC officials.
This would be another blow to some lawmakers and regulators who have been seeking, yet largely failing, to bring the secretive industry out of the shadows.
The $1.5 trillion hedge fund industry is playing an increasingly powerful role in financial markets, whether it is funds calling for the ouster of poorly performing CEOs or financing private equity takeovers.
Attorneys working with hedge funds acknowledge that funds often do not file the so-called Form D private placement document that tells regulators and the public when they start a new fund and also discloses some other details, including who owns 10 percent or more.
Although the document is modest in scope and filed in paper form, making it difficult to view, some hedge funds rankle at having to disclose any information. They also know the SEC lacks enough staff to check that every fund submits the form when starting a new round of capital-raising.
