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.
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The provision targets hedge funds without addressing the systemic risk that led to the 2008 financial crisis, McPartland said.