Academic

Ethiopis Tafara, the SEC's international chief, testified today that:

the SEC has in place several rules that require disclosure of certain sovereign wealth fund activities and sovereign business activities that could raise many of the concerns we hear in our own and other markets. None of these disclosure requirements was designed with sovereign wealth funds or sovereign businesses in mind, but they are nonetheless of value in this context to the extent that many of the concerns that sovereign investing raises are similar to concerns about other types of investment.

Are SWFs so different from other big funds?  CFIUS might think so, but anyone, at home or abroad, might choose to act in a non-profit maximizing way for a little while (to help the party you support, for example, or the country whose favor you are trying to gain).  And in the long run, everyone who does so should be subject to market discipline.  So a lot turns on the idea that the sovereigns may prevent their own regulators from cooperating with the SEC on investigations.  I wonder if that is an important enough problem to require legislation.

On the other hand, providing SWFs with tax advantages ... that's a bit more mysterious.