Rep. Richard H. Baker is expected to introduce legislation todaythat would require large hedge funds to disclose certain financial data quarterly.
Rep. Baker, R-La., chairman of the House Banking Committee's capital markets subcommittee, said his bill is a response to the near-collapse last year of the Long-Term Capital Management hedge fund. The aim, he said, is to enhance market discipline and allow investors to make "more informed judgments about the creditworthiness of hedge funds."
Under the proposal, hedge funds with more than $3 billion of capital, more than $20 billion of aggregate assets, or greater than 10-to-1 leverage would have to report their total assets, leverage ratio, and other financial and risk-related data to the Federal Reserve Board, which would then make the data public.
The bill would also force banks and other public companies to disclose the extent of their material exposure to unregulated hedge funds. -- Scott Barancik