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Last month, Gary Gensler made clear that he was planning to do a whole bunch of things that private equity firms and hedge funds would not like. Well, unlike the p.e. firms themselves, Gary Gensler is not a liar.

The American Investment Council, the private-equity industry’s largest trade and lobbying group, is “concerned that these new regulations are unnecessary and will not strengthen pension returns or help companies innovate and compete in a global marketplace,” according to an emailed statement by Drew Maloney, the group’s president and chief executive.

The Managed Funds Association, which lobbies on behalf of hedge funds, echoed that concern, saying the SEC’s proposed rules would “harm the most sophisticated investors.”

So what exactly are those regulations that the alternative investments lobby thinks are so unnecessary and harmful. Well, for one, it would make it much more difficult for them to lie to their investors about performance and fees by requiring some standardized disclosures which the SEC would audit. But they would also be barred from charging some of those fees they so often like to elide the truth around.

It would go beyond mandating more disclosure to banning some activities by buyout-fund managers, such as charging investors controversial consulting fees and getting investors to pay for managers’ legal expenses when defending themselves against alleged misconduct…. “After a decade of oversight of private fund advisers…it seems requiring better disclosures alone is likely not enough to adequately protect investors,” Ms. Crenshaw said….

“These are things the SEC really did not like,” and the agency found it “frustrating from a policy perspective that as long as you disclosed them, you could do them,” [Ropes & Gray partner Jason Brown] said.

Well, the hedge funds and private equity players now have two months to distill their unhappiness into comment letters that Gensler & co. can ignore. Speaking of which:

FinCEN on Tuesday said it received more than 230 comments in response to its proposed rules [on its proposed corporate ownership database]…. Organizations representing financial institutions and small businesses, expressed concerns over the potential challenges in complying with various aspects of the proposal, including the deadlines for submitting or correcting information submitted to FinCEN.

One early opponent of the CTA, the National Federation of Independent Business, has gone as far as to call on the Treasury to ask Congress to repeal the ownership reporting requirement.

Nice try: Biden’s people are too busy asking Congress for more power over these sorts of things, not less.

[Commodity Futures Trading Commission Chairman Rostin] Behnam suggested Congress pass a law that would allow the CFTC to regulate cash markets for certain types of cryptocurrencies—currently the agency is limited to regulating derivatives—and provide it with funding to conduct additional oversight. Such legislation would aim to fill a regulatory gap, as some types of cryptocurrency claim to fall outside the jurisdiction of the federal government’s other market regulator, the Securities and Exchange Commission…. “There is no one regulator, either state or federal, with sufficient visibility into digital-asset commodity trading activity to fully police conflicts of interest and deceptive trading practices impacting retail customers,” Mr. Behnam said in his prepared testimony.

Anyway, lest anyone think that Gensler is only interested in tormenting people, here he is doing Robinhood a solid while also not causing Wall Street to lose their shit.

Under the proposal, Wall Street would switch to so-called T+1 settlement in which securities trades are settled one business day after a trade is agreed upon by March 2024. It currently takes two business days to settle trades…. Robinhood was among the firms that advocated for accelerating the settlement process…. The SEC’s proposal stops short of ordering T+0 settlement in which trades would settle the same day. Proponents say markets would become more efficient with same-day or even instantaneous settlement. But Wall Street lobbying groups have said same-day settlement would require a fundamental overhaul of many of the stock market’s processes and could introduce new risks.

SEC Proposes Broad Disclosure Rules for Private Investment Funds [WSJ]
SEC Seeks More Disclosures From Private-Equity and Hedge Funds [WSJ]
After retail investors’ rebellion, the S.E.C. wants a stock market makeover. [NYT]
CFTC Chair Asks Congress for Authority to Regulate Some Cryptocurrencies [WSJ]
FinCEN’s Corporate Ownership Rules Stir Debate From Banking, Small Business Groups [WSJ]

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Pension Funds More Than Happy To Spend A Few Basis Points To Know A Bit More About Their Hedge, Private Equity Funds

And for all of their much-vaunted power, it seems they’ll need the SEC’s help to do so.

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SEC Expects To Shame Shameless Industry Into Slashing Shameful Fee Structures

You can make a hedge fund ‘fess up, but you can’t stop it from making its clients cover the costs.

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Bill Ackman Takes Bold Position That He Should Pay More In Taxes

The people’s hedge-fund manager has had it with the carried-interest loophole.

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Safest Investment In The World To Get Safer To Trade

Gary Gensler’s got some new unpleasant plans for his hedge fund nemeses.

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Literally No One Likes SEC Hedge Fund Secrecy Plan, Except The People Who Run The SEC

That’s a big, “Thanks, but no thanks” from the hedge funds on getting rid of most 13Fs.


Activist Investing Basically Insider Trading, Sayeth Gary Gensler

He’s got a lot of plans for the hedge fund industry, and it’s not going to like them.