WEST PALM BEACH, FL (HEDGECO.NET) – The U.S. Securities and Exchange Commission has released more details on the proposed hedge fund regulation initiatives. This follows the highly discussed 3-2split vote a few weeks ago by the commissioners authorizing the proposals. However, many questions remain to be answered, amidst resistance to the plans.<\/p>\n
The proposed measures, according to the SEC, will help the agency to \u00c3\u00af\u00c2\u00bf\u00c2\u00bdcollect basic information about hedge funds and hedge fund advisors, including the number of hedge funds operating in the U.S., the amount of assets, and the identity of their advisors.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd<\/p>\n
The SEC also wants to \u00c3\u00af\u00c2\u00bf\u00c2\u00bdexamine hedge fund advisors to identify compliance problems early and deter questionable practices.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd The new proposals will also \u00c3\u00af\u00c2\u00bf\u00c2\u00bdrequire all hedge fund advisors to adopt basic compliance controls.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd<\/p>\n
The SEC also argues that the new proposals will help to \u00c3\u00af\u00c2\u00bf\u00c2\u00bdimprove disclosures made to prospective and current hedge fund investors,\u00c3\u00af\u00c2\u00bf\u00c2\u00bd as well as \u00c3\u00af\u00c2\u00bf\u00c2\u00bdprevent felons or individuals with other serious disciplinary records from managing hedge funds.\u00c3\u00af\u00c2\u00bf\u00c2\u00bd Portions of the new proposals relating to offshore jurisdictions remain unclear.<\/p>\n
Critics of the new proposals argue that the SEC could achieve all of the above stated objectives through already existing laws. All that is currently lacking is the SEC\u00c3\u00af\u00c2\u00bf\u00c2\u00bds enforcement action, in addition to manpower constraints, which continue to plague the regulatory body.<\/p>\n
There is also the possibility that such laws may actually force many more hedge funds to relocate to offshore tax havens, which have been home for a significant number of US mutual fund companies as well. According to SEC staff estimates, nearly 50% of the US hedge funds have already registered with the SEC.<\/p>\n
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net<\/p>\n
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