Bryan Corbett, the president and chief executive officer of the Managed Funds Association, which represents hedge funds, said the plan was “bewildering” and wouldn’t help mom-and-pop investors. Transparency “is better achieved through other mechanisms,” he said in a statement. “This information is already available to regulators without imposing new, costly, and onerous filings that expose managers to increased risk of retaliation from corporate fraudsters.”
The SEC proposal also calls for bolstering existing requirements for brokers involved in short sale transactions. Currently, brokerages have to mark orders as “long,” “short,” or “short-exempt.” Under the new rule, these firms would also have to label purchases by investors as “buy to cover” if the fund has short positions in the same security. The proposal would require that “buy to cover” data are reported to Wall Street’s market-surveillance system, known as the Consolidated Audit Trail.
The commission will take public comment on the plan and then must hold another vote after making any changes for it to become final.
This article was provided by Bloomberg News.