The Obama administration will on Wednesday unveil draft legislation that will require all US hedge funds with more than $30m in assets under management to register with the Securities and Exchange Commission.The move ends decades of hedge fund independence from regulatory oversight in the US and will include more stringent measures than had been expected by many in the alternative investment industry - including "quite tough" capital requirements to stop large funds "gambling with their size".
The move ends decades of hedge fund independence from regulatory oversight in the US and will include more stringent measures than had been expected by many in the alternative investment industry - including "quite tough" capital requirements to stop large funds "gambling with their size".
Federal Deposit Insurance Corp. Chairman Sheila Bair, with support from Federal Reserve officials, is pushing for tougher measures to curb the size and risk-taking of the nation's largest financial firms. The FDIC will propose slapping fees on the biggest bank holding companies to the extent that they carry on activities, such as proprietary trading, outside of traditional lending. The idea goes beyond the Obama administration's regulation-overhaul plan, which would have the Fed adjust capital and liquidity standards for the biggest firms, without any pre-set fees. "What we have suggested is financial disincentives for size and complexity," Bair said in a July 9 interview. Fed Chairman Ben S. Bernanke told lawmakers last month that restricting size is a "legitimate" option. Size limits would overturn decades of regulatory tradition that promoted the view that large, diversified institutions were more immune to risks when specific industries or regions slumped. Bair's proposal is another chapter in the clashes she's had with Treasury Secretary Timothy Geithner and his department over dealing with banks and the financial crisis.
The FDIC will propose slapping fees on the biggest bank holding companies to the extent that they carry on activities, such as proprietary trading, outside of traditional lending. The idea goes beyond the Obama administration's regulation-overhaul plan, which would have the Fed adjust capital and liquidity standards for the biggest firms, without any pre-set fees.
"What we have suggested is financial disincentives for size and complexity," Bair said in a July 9 interview. Fed Chairman Ben S. Bernanke told lawmakers last month that restricting size is a "legitimate" option.
Size limits would overturn decades of regulatory tradition that promoted the view that large, diversified institutions were more immune to risks when specific industries or regions slumped.
Bair's proposal is another chapter in the clashes she's had with Treasury Secretary Timothy Geithner and his department over dealing with banks and the financial crisis.
