President’s Financial Overhaul Proposals Include Registration of Hedge Fund Advisers and Fiduciary Standard for BDs
The Obama administration has released its white paper with recommendations on re-shaping financial regulation. Among its recommendations include requiring hedge fund and private equity fund managers to register under the Advisers Act and mandating disclosures and reporting of critical financial information about the funds. The recommendations also recommend a fiduciary duty for broker-dealers and a harmonization of BD and RIA regulation. The white paper also recommends a re-examination of money market fund regulation, the creation of a new regulatory regime for OTC derivatives, and harmonization of SEC and CFTC regulation. The administration also calls for increased regulatory and enforcement powers for the SEC.
OUR TAKE: These are significant recommendations. However, the Obama administration did not propose moving mutual fund regulation out of the SEC to the proposed Consumer Financial Protection Agency or the merging of the SEC and the CFTC.