“Oversight of Private Pools of Capital” Is Firmly on the Reform Agenda – What It Might Mean for U.S. Fund Managers

At Mary Schapiro’s January confirmation hearing for her nomination as Chair of the Securities and Exchange Commission, she called for registration of hedge funds.  Members of the Senate Banking Committee promptly pledged to help with legislation, and bills to that effect were put forward before the month was out.  At about the same time, the “Group of 30” – an international committee of current and former senior regulators and bankers – released 18 recommendations for reform of financial market oversight.  Recommendation #4 is titled “Oversight of Private Pools of Capital” and calls for registration and regulation of managers of leveraged investment pools.  With that background it should be clear that the consensus in Washington, DC is that regulation of hedge funds – and likely private equity funds as well – should be part of the overhaul of US financial markets.  In a guest article, Shearman & Sterling partner Nathan Greene fleshes out what that consensus might mean by outlining potential new obligations for fund managers.

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