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US House votes to exempt private equity firms from Dodd-Frank disclosure rules

5 Dec 2013

dcThe US House of Representatives has passed a bill to exempt private equity firms from the Dodd-Frank law’s requirement to register with the US Securities and Exchange Commission.

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.

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.”

“The bill’s passage would deny investors access to important information intended to increase transparency and accountability and to minimize conflicts of interest,” the Office of Management and Budget said in a statement.

“Private equity funds are already subject to less stringent reporting requirements compared to other types of private funds and to an annual, rather than quarterly, filing requirement.

“In addition, private fund advisers with under $150m in assets under management are exempted from registration and subject only to recordkeeping and reporting requirements.”

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