The House of Representatives passed legislation that provides for a comprehensive set of financial reforms, including regulations relating to investment advisers of private funds and over-the-counter (OTC) derivatives. The Wall Street Reform and Consumer Protection Act would require investment advisers to hedge funds and other private funds to register with the Securities and Exchange Commission (SEC), and increases the amount of disclosure and records that must be maintained by registered investment advisers. The bill exempts from these registration and other requirements both (i) venture capital fund advisers (as defined by the SEC in future regulations) and (ii) advisers of private funds to the extent that each private fund managed by these advisers has no more than USD $150 million of assets under management. This comprehensive legislation also gives regulatory authority over OTC derivatives to the Commodity Futures Trading Commission (CFTC) and SEC. The bill would require swaps to be cleared if a clearinghouse accepts them for clearing although a clearinghouse may refuse to clear any OTC derivative product. The SEC or CFTC may investigate a clearinghouse’s refusal to clear a derivative product but cannot overrule its decision. The new legislation would also restrict ownership interest of swap dealers and major swap participants in clearinghouses to 20 percent. The cleared swaps would be required to be traded on exchanges or swap execution facilities, and non-cleared swaps would have to be reported to the regulators under regulations to be adopted by the SEC and CFTC. The text of the bill is available by clicking here.