Compliance

Treasury Secretary Henry Paulson wants to beef up hedge fund regulation as part of his plan for a systemic risk regulator, he said Thursday.

Reserve Funds has entered into an agreement with the U.S. Treasury’s Temporary Guarantee Agreement Program for Money Market Funds, whereby the Treasury will purchase any outstanding securities in the Reserve U.S. Government Fund not sold by January 3.

In a widely anticipated move Wednesday, the Securities and Exchange Commission unanimously approved a requirement for mutual funds to send investors a short-form, summary prospectus.

The European Union, which has been in favor of new rules and capital requirements for hedge funds and private equity, will propose such regulations next month to the European Commission, Reuters reports.

Testifying before the House Oversight and Government Reform Committee last Thursday on the role of hedge funds in the credit crisis, five prominent hedge fund executives said they would be in favor of establishing a public exchange or clearinghouse for credit default swaps (CDS) to make the market more transparent.

The Securities and Exchange Commission will not revisit 12b-1 fees by the end of the year, Andrew Donohue, director of the division of investment management, told Reuters.

The President’s Working Group on Financial Markets is looking at ways to better understand and regulate derivatives and credit default swaps, which essentially are insurance on corporate debt.

The Securities and Exchange Commission will vote at its Nov. 19 meeting next week on a provision to allow shortened mutual fund disclosure statements.

Testifying before the House Oversight and Government Reform Committee onThursday on the role of hedge funds in the credit crisis, five prominent hedge fund executives said they would be in favor of establishing a public exchange or clearinghouse for credit default swaps (CDS)to make that market more transparent.

A systems administrator who was laid off on Nov. 5 from an unnamed mutual fund company in New York wasn’t happy enough with the severance package the company gave him, Computerworld reports.

Money market mutual fund managers holding onto short-term debt they are unable to unload into the market will have to continue to hold on tight, because the Federal Reserve is not going to extend its $540 billion in loans to purchase the paper through the Money Market Investor Funding Facility until next month.

In a poll of bank wealth managers a day after Barack Obama was elected to become the 44th president of the United States, 50% said they expect their high-net-worth clients to be negatively impacted by the new administration, SEI found. Twelve percent said they expect a positive impact, but 38% said they were sure whether it will be positive or negative.

President-elect Barack Obama is expected to begin working on passing an economic stimulus package even before he takes office.

Long-short money managers have been breathing a sigh of relief with the end to the Securities and Exchange Commission's ban on short sales of financial stocks. The three-week SEC ban on the short sale of some 1,000 financial stocks that ended Oct. 9 had wreaked havoc among money managers.

Spurred by Americans' investment losses this year, Rep. George Miller (D-Calif.) is calling for a re-examination of 401(k) plans that could lead to a radical overhaul of the popular tax-deferred savings vehicles, Pensions & Investments magazine reported last week.

Goldman Sachs Asset Management LP plans to launch a new municipal closed-end fund as part of its existing lineup of tax-exempt mutual funds, according to an Oct. 24 registration with the Securities and Exchange Commission. The addition, which is to be called the Goldman Sachs Municipal Opportunity Fund, will bring the firm's number of tax-free mutual funds to six.

The Investment Company Institute announced Tuesday that it is forming a money market mutual fund working group, to be chaired by Vanguard Chairman John Brennan.

Unlike most other markets around the world where hedge funds are allowed to take almost any risks they deem fit, including leveraging their holdings to place outsized bets, Brazil’s hedge fund managers must comply with strict parameters, Dow Jones reports. That means they cannot take margin or collateral calls.

In response to the Securities and Exchange Commission’s charges that it spent more than $600,000 on improper gifts and entertainment for Fidelity Investments traders, Lazard Capital Markets is paying $2.8 million to settle the charges.

NEW YORK - The fragmented, free-for-all liquidity in the marketplace is aggravating the extreme volatility in the stock market, and experts say a more organized, specialized system is needed.