SEC Submits New Rules on Digital Asset and Hedge Fund Disclosure, Proposes to Introduce "Innovation Exemption" Mechanism

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According to Bloomberg, the U.S. Securities and Exchange Commission (SEC) has submitted two proposed rules for review by the White House Office of Management and Budget (OMB), involving digital assets and disclosures for hedge funds and private equity firms. The proposals were submitted on March 20 and made public on Monday. SEC Chair Paul Atkins previewed the digital asset proposal last week, which includes an “innovation exemption” allowing digital asset companies to be exempt from registration as broker-dealers, exchanges, or other regulated entities for a limited time. The other rule involves significant adjustments to Form PF, used by hedge funds and private equity funds to report performance and risk metrics. Atkins previously delayed the effective date of the new Form PF disclosure requirements established during Gary Gensler’s tenure to October 1 and stated that he would explore ways to reduce the disclosure burden.

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