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SEC appoints team to examine private equity funds

7 Apr 2014

dcThe US Securities and Exchange Commission has reportedly appointed a team to examine private equity and hedge funds following the 2010 Dodd-Frank law.

These people will look at areas including how private equity and hedge funds value their assets, said Reuters, citing people familiar with the matter.

The report noted that the SEC has been criticised for missing violations such as the Ponzi scheme at Bernard Madoff’s asset management arm.

Dodd-Frank obliges private equity firms to register with the SEC. Firms registered with the SEC are subject to disclosure requirements that some legislators who supported the bill said would be burdensome and discourage some private equity firms from raising funds.

Last December the US House of Representatives passed a bill to exempt private equity firms from the Dodd-Frank law’s requirement to register.

The bill now needs to pass the Democratic-controlled Senate in order to become a law.

However, even if it wins the Senate approval, it could be vetoed by President Obama, whose administration has criticised the proposed exemption as a “step backwards.”

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