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CFTC and SEC propose amendments to investment advisor reporting form

The Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) are opening a public comment round to amend sections of Form PF.

Investment advisors registered with the SEC and the CFTC use Form PF to provide regulators with confidential information about the asset structure of hedge funds and the proportion of cryptoassets they manage. This provides the commissions with information about the fundamental operations and strategies of the funds, and helps to create a baseline for assessing possible systemic risks.

Regulators have proposed classifying hedge fund reports on cryptocurrencies in a new category other than “cash and cash equivalents” because the current version of the PR form does not include digital assets. According to the commission, the need for changes is caused by the increasing share of crypto assets on the balance sheets of hedge funds.

The SEC and CFTC have proposed adding a definition of “digital assets” to Form PF, which would require hedge funds to report investments and returns associated with “virtual currencies”, “coins” or “tokens” to regulators. Also, investment advisors are encouraged to discuss whether regulators should use the term “cryptoasset” instead of “digital asset”.

The Offices believe that the adoption of common terminology and definitions will ensure that all parties understand the specific type of asset being handled. The SEC and CFTC joint statement set a 40-day deadline for submission of proposals and comments regarding the proposed amendments.

The other day, the former chairman of the Commodity Futures Trading Commission (CFTC) of the United States, Timothy Massad, proposed that the SEC and the CFTC unite to create a self-regulatory organization to control the cryptocurrency industry.

Source: Bits

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