Hedge Fund Advisors Must File With FINRA
October 24, 2011
The Securities and Exchange Commission has designated the Financial Industry Regulatory Authority as the agency to develop and maintain the system for hedge fund advisors to receive new registration forms for hedge fund advisers, for a filing fee of $150.
Form PF, as it is known, helps the SEC understand a lot more about leverage, credit providers, investor concentration and fund performance. The regulator will share the information with the Financial Stability Oversight Council, which now monitors systemic risk.
The new reporting system for Form PF would be an extension of the current FINRA system used to accept separate Form ADVs, called the Investment Advisor Registration Depository (IARD) system.
Advisors to hedge funds with under $1 billion in assets will need to file a condensed version of Form PF annually, while larger advisors will need to complete a longer more detailed version quarterly. In both cases, the SEC wants to know the value of assets under management, the amount of debt being used, counterparty credit risk exposure and performance for each fund. The $150 fee will be the same for quarterly and annual filers.
SEC Backs Away From
MMF Liquidity Facility
The Securities and Exchange Commission, the Federal Reserve and other regulators are not likely to adopt an emergency liquidity facility funded by fund sponsors to backstop money market funds, according to Gregory Johnson, CEO of Franklin Resources.
"It's a fairly complex area and [regulators] are looking at other ideas and solutions," the newly appointed chairman of the Investment Company Institute told Reuters. Likewise, the previous chairman of the ICI, Edward Bernard, vice chairman of T. Rowe Price Group, also recently went on record saying he doesn't think regulators are moving in the direction of a liquidity facility, which the ICI proposed in January.
One of the biggest concerns for regulators and the industry, Johnson said, is how money market funds could afford to fund the facility at a time of such low interest rates.
BRICS Exchanges Partner
To Cross-List Indexes
Exchanges in five of the world's largest emerging markets-Brazil, Russia, India, China and South Africa-forged an alliance to cross-list their respective equity-based index products. MME
The National Stock Exchange of India and rival BSE have signed letters of support and will join the alliance after finalizing requirements. Trades on each of the exchanges will be settled in local currencies and the local trading time zone. That means that an investor in one country can bet on the performance of an index in another country without absorbing any currency risk.
The initiative was announced at the annual general meting of the World Federation of Exchanges in Johannesburg on Wednesday. The countries hope to list the contracts based on their flagship equity indexes by June 2012.
The seven exchanges, which represent a total market capitalization of $9.02 trillion, will eventually develop products to track the BRICS exchanges, thereby permitting investors to get an exposure to the equity markets of the group. Although the term BRICS, coined by Goldman Sachs, refers to Brazil, Russia, India, China and South Africa, Hong Kong is taking the place of mainland China.MME