WASHINGTON (Reuters) - Some global banks are facing billions of dollars in losses after a U.S. investment firm, named by sources as Archegos Capital Management LP, defaulted on margin calls, putting investors on edge about who else might be exposed. Despite reportedly managing several billions of dollars in assets, Archegos Capital was subject to little direct regulatory scrutiny because it operates as a family office for former New York hedge fund executive Bill Hwang. WHAT IS A FAMILY OFFICE? Family offices are entities established by wealthy families to manage their money and provide related services to family members, such as tax and estate planning, as well as managing philanthropic ventures. In a 2021 report, consultancy EY estimates that private family capital now outstrips private equity and venture capital combined, with at least 10,000 single family offices globally - family offices servicing only a single family. Globally, family offices managed nearly $6 trillion in assets as of 2019, according to market research firm Campden Research. ARE THEY REGULATED? Single family offices generally are not regulated. Most family offices historically did not have to register with the U.S. Securities and Exchange Commission because the 1940 Investment Advisers Act exempted firms which advised 15 or fewer clients, according to the SEC. The 2010 Dodd-Frank Act, which was passed in the wake of the 2007-2009 financial crisis, repealed that exemption to ensure hedge funds and other private fund advisers that may have fewer than 15 clients had to register with the agency. But the act in turn crafted a definition for family offices to which it applied the exemption. As a result, any company that provides investment advice about securities to family members and is wholly owned and exclusively controlled by family members or entities is exempted from the Advisers Act, according to the SEC. HOW DOES THAT COMPARE TO HEDGE FUNDS? Critics of the current rules say hedge funds are too lightly regulated, although they do have to comply with some requirements under the Advisers Act, unlike family offices. Hedge funds, which invest money for wealthy individuals and institutions such as pensions and endowments, have to register with the SEC and provide quarterly public reports on their equity holdings via form “13F.” They also disclose their ownership structure, assets under management, bank relationships and other basic operational details. Registered private funds with at least $150 million in assets must also file with the SEC information on the type and size of their assets via form “PF.” That more detailed data, which is kept private, is in turn shared with the Financial Stability Oversight Council to help monitor systemic risk.