The SEC & CFTC open comments for proposal of new reporting rules as both watchdogs, the Securities and Exchange Commission and the Commodity Future Trading Commission have asked for feedback on a proposal that would compel major advisors to certain hedge funds to reveal crypto exposure.

The SEC and CFTC created a 40-day comment period for revisions to Form PF, the confidential reporting form for certain investment advisors to private funds with at least $500 million, in a joint proposed rule. This rule was published in the Federal Register yesterday, September 1.

Because the current edition of Form PR does not directly contain cryptocurrencies, it was suggested that qualifying hedge funds declare their crypto exposure in a category other than “cash and cash equivalents.”

As the SEC & CFTC open comments for proposal members of the public have until Oct. 11 to make comments on the proposed amendments, which were initially offered by the two authorities on Aug. 10.

The SEC and CFTC cited the rise of the hedge fund sector as the rationale for the proposed change at the time, owing in part to the increased popularity of crypto investments since Form PF was adopted during the 2008 financial crisis.

Among the proposed Form PF modification was a description of “digital assets,” which might require some hedge funds to record earnings from investments in “virtual currencies,” “coins,” or “tokens,” depending on the framework. The public was asked to weigh in on whether authorities should use the term “crypto asset” rather than “digital asset.”

“We view these terms as synonymous,” said the proposal. “We are proposing the term and definition to be consistent with the SEC’s recent statement on digital assets, and we believe that such term and definition would provide a consistent understanding of the type of assets we intend to address.”

According to the two regulators, if the plan is approved, investment advisers would be able to submit more extensive information on strategies and exposure to specific assets, allowing the Financial Stability Oversight Council to better analyze possible economic risks. US politicians are also examining several legislative ways to further establish the SEC’s and CFTC’s roles in crypto regulation.

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