SEC and CFTC Support New Reporting Requirement for Cryptocurrency Funds

The US Commodity Futures Trading Commission (CFTC) has approved a joint rule with the Securities and Exchange Commission (SEC) that will oblige hedge funds with more than $500M in AUM to report risks associated with cryptocurrencies.

The initiative is an attempt to improve the FSOC’s ability to control systemic threats and strengthen broader agency oversight.

According to the new rule, crypto funds will inform regulators on the PF form without publicly disclosing the information. Structures will also have to provide information about the largest positions and borrowings.

CFTC commissioner Christy Goldsmith Romero has said on the rule:

“Our goal is to increase the usefulness of the collected data; ensure that the hedge fund delivers risk disclosure as congress intended.”

The proposal has not been back by her colleague Caroline Pham, who was concerned that the proposed requirements had unintended consequences for innovation.