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Hedge Fund Risks May Be Bigger Than Regulators Know, Despite Dodd-Frank 

August 3, 2015

Owen Davies, International Business Times

Hedge fund holdings have surged past their pre-recession levels in recent years and despite new regulations imposed by the Dodd-Frank Act, managers of the funds are still able to mask the risks they pose to the financial system, according to a new federal study.

After the mayhem of the financial crisis in 2008, regulators pushed for insight into the murky world of hedge fund holdings. Now hedge funds -- privately managed firms that pursue a wide range of strategies to maximize depositors' returns -- are required to complete a filing called Form PF, tabulating their risks and liabilities in a series of 79 detailed questions.

But the form allows substantial wiggle room, according to research conducted by staffers at the Office of Financial Research, an agency under the aegis of the Treasury Department. "As a result, Form PF submissions may obscure reporting funds’ actual risks," the authors write.

Read more: International Business Times

 
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