Forbes – The impact of the October 1\u00a0shutdown of the federal government on hedge funds is now playing out in slow motion.\u00a0 While the SEC remains open due to its ability to self-fund for a few\u00a0weeks, its sister agency, the CFTC has shut down.\u00a0\u00a0These are the agencies that provide oversight to the securities and commodities markets that hedge funds trade in.\u00a0 Additionally, these agencies support the rule-making,\u00a0registration and examination systems that are backbone to the integrity of the hedge fund industry.<\/p>\n
The CFTC\u00a0closure is\u00a0particularly unfortunate because the CFTC was just at the critical inflection point of putting in place a large number of the Dodd-Frank mandates, including most importantly, the set up of the swap execution facilities for derivatives trading (SEFs).\u00a0 While the CFTC had granted several short-term deadline exemptions and relief provisions at the end of September, the\u00a0SEF\u2019s that are\u00a0being set up at exactly this time will have to do so without the support of the CFTC.<\/p>\n