US financial regulators are considering new rules aimed at increasing transparency into the trading of the types of derivatives that bankrupted fund manager Archegos last month, according to a report by Bloomberg. Citing “people familiar with the matter”, the Bloomberg report said Securities and Exchange Commission (SEC) officials were in early stages of a review that may lead to greater scrutiny of certain types of trading practices, such as high-risk derivative strategies and short selling. The regulator will review whether such information can be included in existing filings, such as 13D forms (which institutional investors must file if they amass more than 5% of a company’s shares) or the 13F form (which firms with more than $100m under management must file quarterly to disclose their equity holdings). It will also examine if such filings can be made more frequently so that officials can spot potential risk areas building up. Archegos Capital Management Last month Archegos went bust without ever filing such documents, as it had accumulated huge positions through the derivatives market, using total return swaps. It amassed large, concentraded positions in several companies, including Baidu, Vipshop and VaicomCBS. When the bets went bad, the firm defaulted on margin calls with a number of investment banks, including Credit Suisse, which took a $4.8bn hit, while Nomura lost $2bn. Archegos owner Bill Hwang reportedly lost his $20bn fortune in just two days following the collapse of the family office. Short selling The Bloomberg report also suggested the SEC is under pressure from Capitol Hill to make the practice of short selling less murky by forcing investment firms to reveal large short positions that could lead to highly volatile trading conditions. This follows a period in January and February when shares in GameStop lurched lower as hedge funds began to short sell the stock, and then reclaimed losses as retail investors banded together through a subreddit forum to buy the stock. Read more: Nomura internal team to investigate $2bn Archegos-linked loss Ready to get started? Capital.com Download Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk. Share Article