SEC head presses for hedge fund regulation, says agency should ‘expand very significantly’

Hedge funds will face a more aggressive approach from the federal government in months and years to come, Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro said Friday, adding that she’d like the agency to expand to meet those needs.

“I think it’s necessary to regulate hedge funds,” Schapiro said during an interview on the Fox Business Network. “I think they are too big of a part of the marketplace for the SEC and the federal government to not have a handle on the impact they’re having on the markets, the strategies they’re employing — it’s time for that to happen.”

Schapiro said she wanted the funds, which have traditionally been only lightly regulated relative to other parts of the financial services sector, to have to register with the SEC, face more stringent reporting requirements, and be more transparent with their records and business practices with the SEC.

“We need information, so that to the extent they could be engaged in manipulative activity or insider trading,” Schapiro said.

The SEC chairwoman also pressed her case for more funding for the financial oversight agency, which she said would have to “expand very significantly” in coming years.

“The agency is not as big as it needs to be, and we don’t have all of the tools we’d like to have,” she explained. “We could be multiple times larger than we are. So over the next few years, I would like to see the agency expand very significantly.”