The Obama administration on Wednesday will send Congress legislation demanding that hedge fund managers submit to new registration and disclosure rules to boost transparency and limit any risks they pose to the financial system, a senior U.S. Treasury official said.

Later today, we will send legislative language to the Hill that requires registration of all hedge funds and other private pools of capital over a minimum threshold in size, Treasury assistant secretary Michael Barr said in remarks to a business group in Washington.

The bill, one of many Obama administration proposals to revamp financial regulation, would require all investment advisers with more than $30 million under management to register with the SEC and disclose key information about their funds to regulators and investors.

Barr, previewing the legislative language in his speech, said these disclosures would include asset size, borrowings and off-balance-sheet exposures, among other information.

Hedge funds would be subject to periodic reporting requirements and regulators also would have authority under the bill to gain access to information to determine potential systemic risks that they may pose.

Hedge funds found by regulators to be so large, leveraged or interconnected that they pose a threat to financial stability will be regulated as Tier 1 financial holding companies and will be subject to more stringent requirements for capital, liquidity and risk management, Barr said.

Barr said hedge funds do not appear to have been at the center of the current financial crisis, but their de-leveraging contributed to strains in financial markets, while lack of transparency contributed to market uncertainty and instability.

These firms continue to present unknown risks, and that lack of transparency is no longer tenable, Barr said. We need a system that's flexible enough to adapt to the emergence of other institutions that could pose a risk to the system. And we need a system that lets regulators see risks as they emerge across the financial system.

Barr also said the Obama administration's goal in revamping regulation was not to limit the activities of financial firms, but to limit risks posed by those activities.

Higher capital charges can insulate the system from the build-up of risk without limiting activities in the markets, Barr said. That's why we have launched a review of the capital regime and have proposed raising capital standards across the board, including higher standards for financial holding companies, and even higher standards for Tier 1 financial holding companies.

(Reporting by David Lawder; Editing by Andrea Ricci)