The White House yesterday announced a comprehensive plan for regulatory reform of the financial system. The plan's proposals are wide-ranging and include:
- Registration of hedge fund advisers;
- New reporting requirements with respect to investment funds advised by SEC-registered advisers;
- Creation of a new systemic risk regulator;
- Regulation of all OTC derivatives;
- Harmonization of certain aspects of futures and securities regulation; and
- Creation of a new consumer financial products protection agency.
President Obama and congressional leaders have indicated they want to enact these proposals by the end of 2009.
The plan is called “Financial Regulatory Reform – A New Foundation: Rebuilding Financial Supervision and Regulation” and can be accessed at http://www.financialstability.gov/docs/regs/FinalReport_web.pdf.
The day before release of the White House plan, a new proposed hedge fund adviser registration bill was introduced in the Senate. A senior member of the Senate Banking Committee—Senator Jack Reed of Rhode Island—introduced a bill that would amend the Investment Advisers Act of 1940 to require advisers to private investment pools (including hedge, private equity and venture capital funds) to register with the SEC. The proposed legislation—titled the Private Fund Transparency Act of 2009—also addresses the issue of systemic risk highlighted in the White House plan, authorizing the SEC to collect information regarding hedge funds and to share that information with other federal agencies for the purpose of calculating systemic risk.