In last week's Learning Curve, we highlighted certain provisions in the Wall Street Transparency and Accountability Act of 2010 that will impose new requirements and restrictions on a hedge fund that is categorized as a swap dealer or a major swap participant when the various provisions of Subtitles A and B of the Act become effective. In this issue, we discuss the Act's additional requirements for swap dealers and major swap participants and the effects on hedge funds of other significant provisions.
Special Entities
The Act creates new responsibilities for swap dealers and major swap participants that enter into swaps with special entities. Special entities include, among other entities, employee benefit plans, government plans and endowments and Federal and State agencies, states and municipalities. While it is unusual for a hedge fund to be trading with an employee benefit plan or a municipality, the hedge fund itself may be considered ....