Aurelia Butler

WASHINGTON (Reuters) -The U.S. Securities and Exchange Commission (SEC) will propose a new rule on Wednesday aimed at boosting hedge and private fund leverage disclosures, among other details, according to a source familiar with the agency’s thinking.The proposal by the Wall Street regulator would require funds to provide more information on leverage as part of their confidential “Form-PF” disclosures, the person said, adding that the measure would also apply to fund advisers who operate as commodity investors and traders under Commodity Futures Trading Commission rules, the person said. The proposal is part of a broader effort by the SEC to boost transparency of the private fund industry amid worries the industry is a growing source of systemic risk, and follows a January draft rule that boosted other Form PF disclosures.Form PF, which was introduced following the 2007-2009 global financial crisis, is the primary way private funds disclose purchases and sales of securities to the SEC. Regulators have grown concerned over risk in the private industry after hedge fund de-leveraging contributed toward turmoil in the U.S. Treasuries market in March 2020 and hedge funds were again at the center of last year’s GameStop (NYSE:GME) “meme-stock” saga, analysts say.Critics argue that while the sector has ballooned following the 2007-2009 financial crisis, regulatory scrutiny of private funds — which are heavy users of leverage — has not kept up. Wednesday’s rule is expected to boost the level of detail large private-fund and hedge advisors must spell out around their use of leverage, the same source said. The SEC declined to comment. Reuters could not immediately determine what further changes the SEC rule would include.Leverage is a financial technique generally used to increase investment exposure and ramp up returns, but it can also exacerbate losses.The International Organization of Securities Commissions, which comprises regulators across the world, said in a January report that some private fund leverage is being hidden from view. More

BUENOS AIRES (Reuters) – Argentina’s central bank is likely to raise its benchmark interest rate by 600 basis points this week to tackle the country’s high inflation, market participants told Reuters on Tuesday. Analysts and local traders consulted by Reuters agreed that the bank could bring the nominal annual rate to 66% from the current rate of 60%. The decision is aimed at fighting the country’s persistent high inflation, which in July is likely to be 7.2%, a Reuters poll showed. The government will publish its July inflation figures on Thursday.”There are expectations for a new important rate hike by the central bank this week, in an attempt to continue recovering a greater appetite for peso placements and at the same time reduce the search for hedging” in dollars, said economist Gustavo Ber.A spokesperson for the central bank told Reuters that the bank’s board of directors will meet on Thursday, while another official source with knowledge of the matter did not rule out a new rate hike, although he did not define the eventual magnitude.In late July, the bank hiked the rate 800 basis points amid a cabinet reshuffle aiming to curb the economic crisis the country is facing.The newly appointed economy “superminister,” Sergio Massa, said his mandate is to stabilize the country’s situation by lowering the fiscal deficit, strengthening the central bank’s scarce reserves and reducing inflation. [nL1N2ZF2RC More

Last week, Brazil’s central bank raised its key interest rate by half a percentage point to battle the impacts of fuel and food shocks that have kept consumer prices rising above 10% a year even as growth remains subdued.The country’s largest brokerage said its net inflows of 43 billion reais ($8.36 billion) were 43% lower from a year ago, while the total purchase value on XP’s credit card rose 161% to 5.5 billion reais. Assets under custody rose 4% to 846 billion reais as people poured money into its diverse range of products such as bonds, derivatives and pension funds, while active client numbers rose 16%.The company’s adjusted net income rose 1% to 1.05 billion reais in the second quarter and net revenue jumped 14%.Retail gross revenue rose 14% to 2.79 billion reais, while institutional revenue saw a 16% jump to 436 million reais. ($1 = 5.1454 reais) More