The Securities and Exchange Commission on Wednesday punted on finalizing a disclosure deadline for a year, delivering a win to hedge funds who won't have to comply with new reporting requirements until at earliest Oct. 2026.
Wall Street's chief regulator delayed putting into effect a new obligation for investment funds to report the state of their financial positions during market turmoil for a year. They would do so under a so-called "Form PF", a confidential filing already in use for enforcement actions and other regulatory moves.
In addition, SEC Chair Paul Atkins said regulators were also exploring narrowing the number of investment firms obligated to file Form PF without compromising their ability to safeguard sturdy financial markets.
It was the third delay in enacting the disclosure deadline from the SEC since February. The deadline was postponed a second time four months later.
Under the Biden administration, the market regulator sought new disclosure requirements to ensure stricter oversight over the financial sector's with new reporting requirements on investments, borrowing and margin calls.
Hedge fund managers argue the reporting requirements could lead to misleading information about their firms. However, observers warn the SEC may never put the requirements into effect anyway.
Amanda Fischer, a financial policy expert at of the consumer advocacy group Better Markets, called the delay "a huge giveaway to hedge funds."
"Hedge funds already operate in opacity. When a crisis happens, regulators can be in the dark about how a hedge fund's failure might cascade throughout the financial system," she wrote in a social media post. "The 2024 amendments were a modest step to rectify that, and the SEC just spiked it.