At a recent event hosted by the Bipartisan Policy Center, the Securities and Exchange Commission’s (SEC) Hester Peirce expressed criticism about the registration provisions for private funds. The SEC commissioner said such funds are not a systemic risk to the financial system, but they are often viewed as banks. Rather than rely on the Dodd-Frank Act-mandated requirements, she wants to do away with the provisions altogether.
While preferring that there is no mandatory registration of private fund managers, Peirce is open to curtailing the requirements. She highlighted the difficulty in determining where the systemic risk comes from in this part of the financial industry, and the requirements stem from a lack of understanding. Peirce is also open to offering safe harbor to private funds that are examined by another supervisor. If another supervisor reviews the funds, then it can be policed by that supervisor.
