The U.S. Securities and Exchange Commission proposed a rule Tuesday that would require advisors to hedge funds and other private funds to report certain information to the new U.S. Financial Stability Oversight Council.

Under the proposal, larger private fund advisers managing hedge funds, “liquidity funds” (i.e., unregistered money market funds), and private equity funds would be subject to heightened reporting requirements to the FSOC, which monitors risk in the U.S. financial system.

Large private fund advisers would include any advispr with US$1 billion or more in hedge fund, liquidity fund, or private equity fund assets under management. All other private fund advisers would be regarded as smaller private fund advisers and would not be subject to the heightened reporting requirements.

Although this heightened reporting threshold would apply to only about 200 U.S.-based hedge fund advisers, these advisers manage more than 80% of the assets under management, the SEC said.

“The data collection we propose will play an important role in supporting the framework created by the Dodd-Frank Act and is designed to ensure that regulators have a view into any financial market activity of potential systemic importance,” said SEC chairman, Mary Schapiro.

The public comment period on the proposed reporting requirements will last 60 days.

IE