SEC wants authority over hedge funds

WASHINGTON, DC - US Securities and Exchange Commission (SEC) chairman Mary Schapiro has called for the regulator to be given new regulatory powers over the $1.34 trillion US hedge fund industry.

Speaking at the Reuters Global Financial Regulation Summit in Washington, DC, Schapiro said the SEC needs the authority to require hedge fund managers to register with it, as well as having the power to "inspect and examine" hedge funds' books.

Schapiro claims hedge fund registration would not be enough to properly regulate the sector, and giving the SEC more rulemaking authority would make it better able to respond quickly to crises as they arise. US Treasury secretary Timothy Geithner supports hedge fund regulation, and wants hedge funds to publicly disclose their counterparties and leverage to help regulators assess whether a fund poses a systemic risk to the US economy. He has not commented on whether the SEC should be granted additional powers over the sector, however.

House Financial Services Committee chairman Barney Frank told the conference in a separate address that a requirement for fund managers to register with the SEC would be included in a package of financial reforms set to be introduced later this year.