Regulation

CFTC and SEC open comments for proposal to amend crypto reporting rules for large hedge funds

The US Securities and Change Fee, or SEC, and the Commodity Futures Buying and selling Fee, or CFTC, have known as for feedback on a proposal which might require giant advisers to sure hedge funds to report publicity to crypto.

In a joint proposed rule printed to the Federal Register on Sept. 1, the SEC and CFTC established a 40-day remark interval for amendments to Type PF, the confidential reporting doc for sure funding advisers to personal funds of not less than $500 million. The proposal recommended qualifying hedge funds report publicity to crypto in a distinct class aside from “money and money equivalents,” as the present iteration of Type PR doesn’t particularly point out cryptocurrencies.

Members of the general public have till Oct. 11 to submit feedback concerning the proposed adjustments, which the 2 regulators first launched on Aug. 10. On the time, the SEC and CFTC cited the expansion within the hedge fund business as the explanation for the proposed change, due partially to crypto investments changing into extra frequent since Type PF was launched following the 2008 monetary disaster.

Among the many recommended adjustments to Type PF included a definition of “digital belongings,” doubtlessly requiring sure hedge funds to report earnings based mostly on investments in “digital currencies”, “cash”, or “tokens” relying on the framework. The general public was invited to touch upon whether or not the regulators ought to use the time period “crypto asset” as an alternative of “digital asset.”

“We view these phrases as synonymous,” stated the proposal. “We’re proposing the time period and definition to be in step with the SEC’s latest assertion on digital belongings, and we imagine that such time period and definition would offer a constant understanding of the kind of belongings we intend to handle.”

Associated: Chairs from the SEC and CFTC discuss crypto regulation at ISDA assembly

The 2 regulators claimed that, if applied, the proposal may permit funding advisers to supply extra detailed data on methods and publicity to sure belongings, which might permit the Monetary Stability Oversight Council to higher assess potential dangers to the economic system. U.S. lawmakers are additionally at present contemplating totally different legislative approaches that goal to higher set up the SEC’s and CFTC’s function in regulating crypto.

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