Kelley Howes spoke to MarketWatch about the potential for risk building up in hard-to-see parts of the U.S. financial system after regulators are imposing new rules meant to ensure their safety during periods of financial turmoil.
According to Kelley, regulators "aren't even trying to hide the ball" and state in their rule change proposals that the additional data they're proposing to collect will help with routine regulatory examination of investment advisers.
The new rules would require private funds to report within 24 hours certain "key events" like extraordinary investment losses and significant default and redemption events. Such rules would require funds to greatly expand their compliance departments in order to engage in "constant monitoring" to avoid running afoul of new regulations, Kelley said.
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