Hedge, equity rules tighter

WASHINGTON – The largest U.S. hedge funds and private equity funds must report financial information to the government starting next year under a rule finalized Monday.

The Commodity Futures Trading Commission approved the rule that was also passed last week by the Securities and Exchange Commission. The reporting requirements were mandated under the 2010 financial overhaul law.

Both agencies backed off broader requirements proposed earlier this year after the industry objected.

Under the rule, hedge funds with $1.5 billion or more in assets must file financial reports each quarter and private equity firms with $2 billion must report on their finances annually.

In January, the agencies proposed hedge funds and private equity firms with $1 billion or more in assets report on their finances each quarter.

The final rule also gives funds more time to file the reports than initially proposed.

The rule takes effect in June 2012 for funds with $5 billion or more in assets and in December 2012 for funds with less than $5 billion in assets.

Hedge funds are investment pools that use complex trades to seek big returns. They command trillions of dollars in assets and account for about 20 percent of all stock trading. Private equity funds focus on buying and reselling companies.