• 1 hour India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 6 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 10 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 16 hours Conflicting News Spurs Doubt On Aramco IPO
  • 17 hours Exxon Starts Production At New Refinery In Texas
  • 19 hours Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 2 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 5 days Trump Passes Iran Nuclear Deal Back to Congress
  • 5 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 6 days Renewable Energy Startup Powering Native American Protest Camp
  • 6 days Husky Energy Set To Restart Pipeline
  • 6 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 8 days Syria’s Kurds Aim To Control Oil-Rich Areas
Alt Text

Finally: A Way To Invest In Blockchain

Cryptocurrencies and the blockchain are…

Alt Text

5 Big Gainers In Oil & Gas This Week

Energy stocks have been among…

Alt Text

Why Wall Street Is Bullish On Refiners

Wells Fargo has noted that…

Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Hedge Funds are About to Undress

The July 21 deadline for the hedge funds to register required by the one year anniversary of the Dodd-Frank bill is fast approaching, and the industry is roiling with turmoil. The net result for the rest of us could be shrinking market liquidity and falling asset prices as hundreds of funds shut down or move overseas rather than meet the new, onerous disclosure requirements and the vastly increased legal liabilities they imply.

The new regulations raise the level of disclosure virtually to the same level already demanded by your garden variety, plain vanilla mutual fund. Details will have to be released about assets under management, performance, strategy, risk management procedures, custody, brokerage relationships, soft dollar arrangements, commission discounts and kickbacks, fees, compensation of the managers, types of clients, conflicts of interest, and of course, their largest holding. All of this information must be provided in plain English, filed with the SEC, where it will be available online to the public.

The filings will provide a treasure trove of information about this most secretive corner of the financial markets. Commercial banks and mutual funds have long complained that hedge funds gained an unfair advantage hiding behind the curtains. Previous efforts to register the industry were thrown out of the federal courts, since they do not deal with the public. It took a massive lobbying effort in Washington to bring them to heal once again.

Hedge fund managers feel they are getting a raw deal. They were virtually the only class of financial institution that did not need a government bailout during the financial crisis. The cost of compliance will run many millions of dollars per fund. Even the slightest error in the filings, such as a 0.1% error in performance claims, could open them up to claims of securities fraud. Publication of holdings will allow competitors to game the market against them. The compensation information will provide a ripe target for divorce lawyers and other civil litigants. Frivolous law suits will soar. Kidnappers have also been provided a handy shopping list.

The are few exemptions left. Venture capital funds and family offices need not register. Nor do foreign based hedge funds with 15 or less US clients, less that $25 million in assets raised in the US, and no American based offices.

The largest funds, like Bridgewater ($58.9 billion), JP Morgan $45.5 billion), and Paulsen & Co. ($36 billion) will no doubt register, as they are too big to move and the incremental cost is small. It’s another story for small funds, which may decide to move to foreign centers like Geneva or Singapore rather than undress in public. The net result could be a flight of capital from the US markets and falling prices, as the deadline coincides with the seasonal summer lull.

By. Mad Hedge Fund Trader




Back to homepage


Comments currently closed.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News