Regulatory Reporting for Hedge Funds – An Expert Explains Why It Is Important

Since hedge funds are private entities and have few public disclosure requirements, this is sometimes perceived as a lack of transparency. Another common perception of hedge funds is that their managers are not subject to as much regulatory oversight and/or registration requirements as other financial investment managers.  As such, it is sometimes thought that they are more prone to manager-specific idiosyncratic risks such as style drifts, faulty operations, or fraud. New regulations introduced in the US and the EU as of 2010 require hedge fund managers to report more information, leading to greater transparency. In addition, investors, particularly institutional investors, are encouraging further developments in hedge fund risk management, both through internal practices and external regulatory requirements. The increasing influence of institutional investors has led to greater transparency: hedge funds increasingly provide information to investors including valuation methodology, positions and leverage exposure.

 

Mr. Rhodes feels it is imperative to implement a structured business process to streamline regulatory reporting aimed at reducing costs while increasing accuracy.

In the United States, under the Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the SEC and CFTC requires registered advisers to hedge funds and other private funds to file Form PF (Form Private Funds). In addition, the CFTC requires hedge funds that are deemed Commodity Pool Operators to file Form CPO-PQR which has similar requirements but is nonetheless somewhat different. In the European Union, under the Alternative Investment Fund Manager Directive (EU AIFMD), hedge fund managers who market in the EU are required to report to the relevant regulator or National Competent Authority (NCA). Increasingly, regulators in other jurisdictions are implementing their own version of Form PF and EU AIFMD.

Some hedge funds have successfully completed their filings but have relied on an ad-hoc manual effort which is error prone, disruptive to regular business, and time-consuming for key personnel.  Jason strives to implement a structured workflow process to streamline regulatory reporting preparation and filing, thus reducing the time and effort required to file.

Jason B Rhodes holds a BBA (Finance and Economics) from Bishop’s University in Quebec, Canada.   Jason completed post-graduate course work in Risk Management at Columbia University in NY.  With 20+ years of experience in the Financial Services and Hedge Fund industry, Jason provides market risk oversight on equity capital markets as well as regulatory reporting advisory services.  He was employed as the Senior Risk Analyst at one of the largest hedge fund management firms in the world.  He then assumed the role of Managing Director, Risk Reporting and Measurement for a Manhattan and Greenwich, CT based firm specializing in Risk Management and Regulatory Reporting.  Jason has served clients across the USA, Canada, Europe and Asia.

In his off time, Jason is busy raising his family in Darien, CT.  In addition to playing hockey himself, he enjoys coaching his kids’ hockey teams.  Mr. Rhodes and his family love to ski, travel, play tennis, golf and play in the waters of the Long Island Sound.  He can be reached by visiting JasonBRhodes.com.

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