The Treasury Department plans to unveil proposed legislation that would require all hedge funds and private capital pools with more than $30 million under management to register with the Securities and Exchange Commission.
The relatively low $30 million threshold is aimed at allowing the government to gather a wide swath of market information.
"These firms continue to present unknown risks, and that lack of transparency is no longer tenable," Treasury Assistant Secretary for Financial Institutions Michael Barr said in a Wednesday speech.
The legislation would require hedge funds to disclose more information about asset size, borrowing, off-balance-sheet exposures and counterparty risks.
The legislation also would regulate large, highly leveraged and heavily interconnected firms as Tier 1 financial holding companies, subjecting them to more stringent capital, liquidity and risk management rules.