US Stock Market: US agencies open public comment on plan to revise private fund reporting rules

The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission jointly proposed reforms to regulations governing enhanced disclosures by the $26 trillion private fund industry.

The agencies said the proposed changes are intended to ease compliance burdens on private funds and investment advisers while preserving the collection of information they consider necessary and appropriate for monitoring financial stability.

The disclosure framework was originally introduced in 2024 during the Biden administration, requiring hedge funds, private equity firms and other private fund managers to report detailed information on investment exposures, counterparties, currencies, geographic and industry concentrations, performance by strategy, and portfolio liquidity. Regulators at the time argued that the rules were essential for identifying systemic risks in the financial system, Reuters reported.


However, Republican members of both commissions had opposed the measures, expressing concerns that the requirements were overly broad and could expose sensitive proprietary data. Currently, neither commission has Democratic members, and since taking office, the Trump administration has delayed implementation deadlines multiple times to allow for revisions.

Under the new proposal, the threshold for smaller advisers required to report would increase from $150 million to $1 billion in assets under management. For large hedge fund advisers, the threshold would rise from $1.5 billion to $10 billion. Despite these changes, the SEC estimates that the revised framework would still cover about 90% of total assets under management in the sector, according to Reuters.

The proposal has drawn mixed reactions. Better Markets, an advocacy group supporting stricter financial regulation, warned that loosening disclosure requirements could exacerbate risks at a time when private equity and private credit markets are already under strain. The group also raised concerns as policymakers consider allowing retirement savings accounts to invest in private funds.

In contrast, the Alternative Investment Management Association, which represents the private fund industry, indicated that the proposal appears to appropriately balance risk oversight with reducing regulatory burdens, Reuters reported.

The proposed changes will undergo a 60-day public comment period before regulators decide whether to adopt a final version.