AFREF, the Institute for Policy Studies, Global Economy Project, and Public Citizen led a letter with 22 additional signatories to the agencies tasked with implementing section 956 of Dodd-Frank. That section tasked six agencies with promulgating regulations to prevent incentive-based executive compensation that encourages “inappropriate risk” by May 2011. Almost 12 years later, we don’t have a final rule. The letter was sent to regulators ahead of congressional hearings that will examine recent bank failures.
AFREF and Demand Progress Education Fund attended a meeting of the Market Risk Advisory Committee for the Commodity Futures Trading Commission. There, AFREF/DPEF staff gave remarks on digital assets, including recommendations to the Committee regarding research and analysis into proper regulatory oversight of the digital assets sector. Recommendations included research into cybersecurity risks associated with crypto platforms and crypto derivatives, as well as a review of due diligence processes conducted by the CFTC and other regulators when CFTC registered entities involved in digital assets are acquired by another firm.
AFREF and Demand Progress Education Fund submitted comments to the Office of Science and Technology Policy (OSTP) in response to the agency’s request for information regarding the risks, limitations and purported benefits of blockchain technology (including regarding central bank digital currencies), to help inform the government’s research and development agenda on blockchain. The submission raised concerns about the technological limits and risks of blockchain as used for both financial and non-financial applications, as well as a variety of risks, and urged the OSTP to take a more balanced and sober look at blockchain in view of these limitations.
AFREF led a letter with 29 signers to the Securities and Exchange Commission reiterating the important need to pass a strong set of final rules related to requiring private fund advisers to disclose a complete breakdown of fees/expenses, assumptions used to calculate returns, and the existence of side letters to investors.
The letter is also urging the SEC to finalize a strong set of rules related to requiring private fund advisers over a certain size to report more detailed information about their holdings confidentially to the SEC so that the SEC and other financial regulatory agencies have much greater insight into the risks in the $21 trillion private fund space where there is currently little visibility in order to better safeguard the financial system.
AFREF sent a letter in support to the Securities and Exchange Commission on its proposal to better protect investors and the financial system from the problems in the $21 trillion open-end fund market.
AFREF sent a letter in support of proposals from both the Securities and Exchange Commission and Commodity Futures Trading Commission that would provide the agencies and by extension the Financial Stability Oversight Council with additional information from the $18 trillion private fund industry related to: more specific details about their holdings in digital assets, more granular data around derivatives and swaps that reference corporate debt and information about the base currencies their holdings are denominated in. Such information will help regulators ensure that they have a clearer picture into the holdings and risks posed by the $18 trillion private fund industry in order to be able to react proactively to any risks that may threaten the financial system.
AFREF sent a letter to the Securities and Exchange Commission supporting its proposal to treat index providers as investment advisers given the many traits of index providers that resemble investment advice.
Such proposals are necessary as index funds have grown to become a multi-trillion dollar industry but one whose decisions to include or exclude issuers from the indices, and which many fund managers must closely follow, remain opaque and feature a number of conflicts-of-interest.
AFREF sent a comment letter to the Securities and Exchange Commission supporting several of its proposals that would better protect investors in private funds (such as hedge funds and private equity firms) that currently do not have the basic, necessary information they currently need to make informed decisions.