Gensler Says SEC Plans More Swaps Disclosures Post-Archegos
(Bloomberg) -- The U.S. Securities and Exchange Commission is considering more disclosures for complex derivative transactions like those that led to the collapse of Bill Hwang’s Archegos Capital Management earlier this year.
SEC Chair Gary Gensler said in a Wednesday CNBC interview that the regulator wants to publish aggregate data on the securities that underlie investment firms’ swap positions. Gensler has already said the agency is considering rules to make hedge funds, family offices and other money managers disclose big derivative bets on stocks in quarterly SEC filings.
“We’re going to be doing more with aggregate disclosures of these positions,” Gensler said in the interview. “I’ve asked staff for recommendations on how we can put out -- with the thought of Archegos in mind -- how we can put out aggregate information about the aggregate positions in securities underlying the total return swaps.”
The Archegos debacle revealed a glaring regulatory blind spot that Washington has long neglected: the use of swaps to place undisclosed bets on stocks.
The SEC hasn’t completed a task required by the Dodd-Frank Act that it approve vast databases to track these derivatives, something lawmakers mandated to ensure watchdogs were keeping tabs on complex instruments that contributed to the 2008 financial crisis. The agency has said the databases will be live later this year.
The SEC’s lack of insight into this type of trading, as well as a 2011 regulation that exempted family offices from tough oversight, became a flash point after the Archegos blow-up.
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