The US SEC and CFTC have proposed easing disclosure requirements for the $26tn private funds industry, in a joint move that would significantly narrow the scope of Biden-era reporting rules for hedge funds, private equity firms and other large asset managers, according to a report by Reuters.
The regulators said the revisions are intended to reduce compliance burdens while still ensuring regulators receive “necessary and appropriate” data on systemic risk exposure.
The original 2024 framework required detailed reporting on fund exposures across counterparties, asset classes, currencies, countries and industries, as well as portfolio performance and liquidity. The rules were designed to improve transparency and help regulators identify build-ups of risk across private markets.
Under the new proposal, reporting thresholds would be materially raised, meaning fewer firms would fall under the regime. The asset threshold for smaller advisers would increase from $150m to $1bn, while the definition of “large” hedge fund advisers would rise from $1.5bn to $10bn in assets under management.
Despite the narrower scope, the SEC estimates the revised framework would still capture around 90% of industry assets.
The move reflects a broader regulatory shift under the current US administration, which has repeatedly delayed implementation of the original rules while reviewing potential adjustments.
The initial 2024 requirements faced criticism from Republican commissioners at the time, who argued the disclosures were excessive and raised concerns over the protection of sensitive proprietary data.
Industry groups have largely welcomed the latest proposal. The Alternative Investment Management Association said the changes appeared to strike a more appropriate balance between risk monitoring and compliance costs.
The proposal will now enter a 60-day public consultation period before any final rule is adopted.
