A tightening up of end user exemptions would have more hedge funds falling under proposed capital requirements and OTC derivative clearing and execution mandates. This language is up for quite a fight in the Senate still, as the definition of “Major Swap Participant” will have major implications for the financial markets post-reform, but it seems certain at least some of the biggest hedge funds will fall under the umbrella. Question is does the Lincoln bill take things to far? I think so:
“They’re trying to get the hedge funds that are big parts of the market but off the public radar,” Kevin McPartland, a New York-based senior analyst for the Tabb Group, a research and advisory firm based in Westborough, Massachusetts, said in an interview today.
The provision targets hedge funds without addressing the systemic risk that led to the 2008 financial crisis, McPartland said.