Congresswoman Cathy McMorris Rodgers posted a link to the Fox Business News web site concerning a "little-noticed provision of the recently passed financial reform legislation".
McMorris Rodgers pronounces it very disturbing and asks, "What are they trying to hide?"
Now I don't know that anyone is trying to hide anything. When you look up the bill and see the different versions and check out the first version submitted to the House back on December 2, 2009, you'll see this "very disturbing" language was in there from the start. Any person with Internet access could have read that seven months ago, including all members of Congress who all presumably read this legislation before they debated and voted on it. Nobody has said a word. Well, some people did and did something about it. Yes, can you believe the Project on Government Oversight got involved?
No if anyone is hiding something here, it's Fox Business News and Congresswoman Cathy McMorris Rodgers.
Herrick, Feinstein, LLP, a firm that appears to be well versed in this area provides this explanation of the legislation:
For hedge and private equity fund advisers subject to SEC registration, the Act would authorize the SEC to impose substantial new recordkeeping and reporting requirements. The Act would treat all records and reports of a private fund that a registered investment adviser manages as the records and reports of the adviser itself and thus subject to examination by the SEC. The Act would also require registered hedge and private equity fund advisers to participate in systemic risk reporting to the newly established Financial Stability Oversight Council (the "Council). Specifically, fund advisers will be required to maintain records and provide the SEC with reports (which will be made available to the Council) concerning assets under management and the use of leverage, counterparty credit risk exposure, trading and investment positions, valuation policies and practices, types of assets held, side letters with certain fund investors, trading practices and other information necessary for an assessment of systemic risk.
Funds must maintain these records for as long as the SEC deems necessary, and the records may be subject to periodic or special examinations by the SEC. All record submissions to the SEC or the Council will be kept confidential (except with respect to disclosures to Congress, other government agencies or pursuant to court order) and are exempt from Freedom of Information Act disclosure. The Act attempts to strike a balance between the regulators' need to assess systemic risk and the fund advisers' need to keep their proprietary information confidential.
But don't let that stop our congresswoman from making political hay. After all, it is an election year.