News has surfaced that the SEC would be voting on hedge fund disclosures this week.
The SEC has approved hedge fund disclosures through Form PF.
This topic first came about back in October of 2021, where the SEC said they were going to be imposing a new rule on hedge funds.
This rule would force money managers to periodically disclose short sale reports.
It seems the Securities Exchange Commission has now come to a voting process and approved it the proposal on January 26th.
Welcome to Franknez.com – the blog for retail investors. The SEC just approved the proposal for hedge fund disclosures after the ‘meme stock’ frenzy that has exposed them. So, what’s next?
Let’s get started!
SEC to strengthen quarterly trade details disclosure
The SEC approved the proposal to increase hedge fund trade disclosures.
While Gary Gensler hasn’t made the full details of this proposal available, he reported that there would be an increase in the frequency and details of hedge fund disclosures.
In this official approval letter by the SEC, Gary Gensler says they have identified significant information gaps and situations where they could benefit from with additional information.
Hedge funds and other private funds use the Form PF to disclose quarterly details of their trades.
Form PF is mandated by the 2010 Dodd-Frank financial reform law and is also used by the Financial Stability Oversight Council to monitor risks to the U.S. financial system, via. Reuters.
However, the forms have not provided sufficient information.
This has allowed hedge funds to remain under the radar when it comes to certain market practices.
Gensler said that the proposal would also boost pay disclosures to monitor the pay versus performance metrics of its workforce.
SEC Approves hedge fund disclosures proposal
In the press release, Chairman Gary Gensler advises hedge fund managers and private offices will be required to report extraordinary investment losses or significant margin and counterparty default events.
Our of the 4 who voted, Hester Peirce voted no for market transparency.
Will the SEC uncover the blatant manipulation and overleveraging these hedge funds have gotten themselves into?
Will they be forced to liquidate positions that may cause systemic risk?
Leave a comment below with your thoughts.
Overstock Founder says SEC has always turned a “blind eye”
Any news about the SEC should be taken with a grain of salt.
The SEC tried imposing several rules in 2021 that would prevent hedge funds from manipulating the market but have failed to protect retail investors.
In an effort to squeeze shorts from their short positions in AMC and GameStop, hedge funds continue to suppress the stock’s price through various loopholes.
In a recent interview with Overstock’s Founder Patrick Byrne, he provides retail investors with deep insight on what’s been occurring for decades.
Retail investors have been right about how hedge funds can sway the stock market in their favor.
And while the SEC has not done anything to prevent the market manipulation, retail investors say the SEC is complicit.
Will the SEC protect retail against market manipulation?
Retail investors buying AMC and GME stock want the stock price to run without any hedge fund market manipulation.
The retail demand for both these tickers are extremely high, even as hedge funds overleverage their positions to short them.
Naked shorting, dark pool trading, and OTC trading are a few ways hedge funds have been able to synthetically drive ‘meme stocks’ down.
The lack of regulation of these financial institutions has increased systemic risk and has negatively impacted the integrity of the stock market.
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