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U.S. Securities and Exchange Commission

Speech by SEC Commissioner:
Statement at SEC Open Meeting — Reporting by Investment Advisers to Private Funds and Certain Commodity Pool Operators and Commodity Trading Advisors on Form PF


Commissioner Kathleen L. Casey

U.S. Securities and Exchange Commission

Washington, D.C.
January 25, 2011

I join the Chairman in thanking the Staff of the Division of Investment Management for its hard work in developing this release, as well as those with whom the Staff consulted, in particular other Divisions here at the Commission and the Staffs of the CFTC and the FSOC.

Today’s proposed rule seeks to gather data from registered advisers to private funds that will be used by the FSOC in its mandated role of identifying risks to the financial stability of the United States.

Form PF is intended to elicit a range of key data points regarding the activities and characteristics of certain private funds that will then assist the FSOC in monitoring the financial markets on an ongoing basis for systemic risk. Thus, for example, the proposing release seeks information related to the use of leverage by private funds. Similarly, we seek information related to the relationships between the fund and other parties. This is consistent with the initial assessment by the FSOC that the use of leverage and a fund’s inconnectedness with other financial market players may be important factors when evaluating systemic importance.

While identifying key data, the release does not seek to determine that any particular category of private funds is systemically significant, or could potentially pose a risk to the stability of the financial markets. Instead, the activities and characteristics that Form PF focuses on have already been preliminarily identified as useful for assessing systemic significance.

Given the focus of the proposed reporting — the collection of data that will allow for the monitoring of those fund activities or characteristics that may signal the potential to cause financial instability — I am interested in comment on whether the metrics we propose today are appropriate or useful to that particular purpose. For example, have we appropriately identified categories of data that are relevant to those fund activities or characteristics that may indicate systemic risk? And relatedly, are we unnecessarily seeking data relevant to those activities or characteristics that do not correlate to an increased level of systemic risk?

Again, I thank the Staff for its good work.



Modified: 01/25/2011