The U.S. Securities and Exchange Commission (SEC) is proposing to sharply raise the threshold that triggers regulatory reporting requirements for institutional investment managers.
The SEC proposed to boost the threshold at which fund managers must file reports designed to give regulators greater insight into the activities of large fund managers.
The proposal would boost the threshold from US$100 million in equities — the level that was adopted when reporting requirements were introduced in 1978 —to US$3.5 billion.
“Monitoring equity holdings of large institutional investment managers is an important part of our regulation and oversight of the securities markets,” SEC chairman Jay Clayton said in a statement.
Since the requirements were first introduced, the total U.S. market cap has grown from US$1.1 trillion to US$35.6 trillion, the SEC noted.
Clayton said that boosting the threshold to better reflect today’s markets will reduce the regulatory burden on smaller fund managers, while ensuring that large firms are still reporting to the commission.
The proposal was criticized by SEC commissioner Allison Herren Lee, who said that the move would eliminate the regulator’s visibility into portfolios controlling US$2.3 trillion in assets.
“This proposal joins a long list of recent actions that decrease transparency and reduce both the commission’s and the public’s access to information about our markets,” Lee said in a statement.
The proposal will go out for a 60-day public comment period once it’s published in the Federal Register.