SEC Hedge Fund Bonus Ban

SEC Hedge Fund Bonus Ban

SEC Moving Toward Banning Hedge Fund Bonuses?

The Securities and Exchange Commission is looking to limit hedge fund bonuses in an effort to reduce risk-taking. Yesterday, the SEC voted that would require investment banks and hedge funds over $1 billion AUM to reveal staff bonuses. The SEC could then ban bonuses on the basis of discouraging risk-taking.
The Securities and Exchange Commission (SEC) voted yesterday for a proposal that would force brokers and investment advisers, including hedge funds, with more than $1bn (£610m) in assets to reveal staff bonus arrangements annually.

The regulator could then ban bonuses if they were judged to cause excessive risk-taking.

The proposal by the SEC, which failed to win the backing of the regulator’s two Republican commissioners, follows a similar proposal made last month for banks by the Federal Deposit Insurance Corporation (FDIC), a fellow regulator.

The SEC and FDIC are currently working to turn into specific rules the financial reform legislation passed in last summer’s Dodd-Frank Act. Source

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