Cayman Net News – As the $1.1 trillion hedge fund industry continues to move into mainstream investing, regulators will focus more of its efforts on protecting the consumer according to the Elizabeth Jacobs, Deputy Director of International Affairs at the Securities and Exchange Commission (SEC) who spoke at the GAIM Cayman Conference on 3 May.
“There is a trend for collaboration and cooperation among regulators around the world,†said Ms Jacobs. “And because of the global nature of hedge funds there may be cases when regulators in multiple countries will need to cooperate in enforcement actions where it is warranted.â€Â
The SEC required in February that hedge fund advisors who had more than 14 US investors and $30 million in assets be registered. Ms Jacobs noted that since the SEC requirement took effect on 1 February, 877 new hedge fund advisors have been registered, for a total of 2400 advisors, representing 11,500 hedge funds.
Some industry experts have stated that many hedge fund advisors would try to get around the registration requirement.
But according to Ms Jacobs the impact whether positive or negative still remains to be seen. However, there has been some early feedback that hedge funds registered with the SEC has actually enhanced its marketability, as it appears to be safer from fraud or valuation abuse.
She added that a particular concern by regulators is the valuation of illiquid assets, which could be vulnerable to abuse.
