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SEC Plan Forces Firms Like Archegos to Reveal Swap Positions

  • Regulator on Wednesday proposed a slate of new regulations
  • Money market funds would also face more liquidity requirements
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The U.S. Securities and Exchange Commission is seeking to restrict hedge funds and family offices from using equity-based swaps that can be used to quietly build massive bets on companies.

Source: Bloomberg
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U.S. regulators are seeking to restrict hedge funds and family offices from using complex derivatives to secretly build huge stakes in public companies -- the types of trades that fueled the collapse of Archegos Capital Management.

The Securities and Exchange Commission proposed new rules to address a major regulatory blind spot exposed by fallout from the implosion of Bill Hwang’s firm earlier this year: Equity-based swaps that can be used to quietly build massive bets on companies.