{"id":5790,"date":"2007-03-12T00:00:00","date_gmt":"2007-03-12T00:00:00","guid":{"rendered":""},"modified":"-0001-11-30T00:00:00","modified_gmt":"-0001-11-30T04:00:00","slug":"mfa-comments-on-sec-proposed-accredited-natural-person-and-antifraud-rules","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/03\/2007\/mfa-comments-on-sec-proposed-accredited-natural-person-and-antifraud-rules.html","title":{"rendered":"MFA Comments on SEC’s Proposed Accredited Natural Person and Antifraud Rules"},"content":{"rendered":"

HedgeCo.net – WASHINGTON, D.C., March 12, 2007<\/span><\/em> — Managed Funds Association (MFA) submitted a comment letter to the Securities and Exchange Commission (SEC) on Friday, March 9,2007 in response to its request for comments regarding its proposed rules on \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cAccredited Investors in Certain Private Investment Vehicles,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d (\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cAccredited Natural Person Rule\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d) and \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cProhibition ofFraud by Advisers to Certain Pooled Investment Vehicles,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d (\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cProposed Antifraud Rule).
<\/u><\/em><\/strong> MFA, headquartered in Washington, DC, is the unified voice of thehedge fund industry representing professionals who specialize in alternative investment strategies, including the majority of the world\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s largest hedge funds.
Proposed Accredited Natural Person Rule
<\/u><\/em><\/p>\n

MFA said it supports the SEC\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s effort to raise the financial eligibility standard for investors in private pools of capital.  MFA has long endorsed raising the net worth and income thresholds, noting that the Accredited Investor standard has not been changed since 1982, and commended the Commission for addressing the issue. <\/span><\/p>\n

 <\/span><\/p>\n

 \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cMFA is in favor of amending the Accredited Investor standard and believes that adjusting the net worth and income thresholds for inflation would provide a simple, yet effective solution to addressing the Commission\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s investor protection concerns,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d said John G. Gaine, president.  \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cWe believe this simple adjustment would sufficiently protect investors without added burden and complexity.\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d<\/p>\n

 <\/p>\n

MFA said it is concerned that the Commission\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s Proposed Accredited Natural Person Rule would be confusing to investors.  MFA noted that the addition of the proposed definition, Accredited Natural Person, to the seven existing financial sophistication standards under current federal regulations, which include Accredited Investor, Qualified Client, Qualified Purchaser, Qualified Institutional Buyer, Qualified Eligible Person, and Eligible Contract Participant, may prove too complex.<\/span><\/p>\n


<\/span> Mr. Gaine said MFA believes raising the net worth and income thresholds under the current Accredited Investor standard would improve investor protection while mitigatinginvestor confusion and avoiding additional compliance costs for the hedge fund industry and their investors.  MFA also encouraged the Commission to add a grandfather provision for existinginvestors, and to permit fund employees to invest in their employer\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s funds in order to provide investors with the added protection of having employee interests aligned with investor interests.
Proposed Antifraud Rule
<\/u><\/em><\/p>\n

MFA told the Commission that it fully supports the adoption of an antifraud rule that would protect investors, and believes the Proposed Antifraud Rule, as drafted, could unintentionally cause a fund to limit investor correspondence and information.<\/p>\n

 <\/p>\n

 \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cMFA believes the Proposed Antifraud Rule, as drafted, may have the unintentional consequence of creating a chilling effect that may cause funds to suppress information, rather than encourage more transparency and dialogue with investors,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d explained Mr. Gaine. <\/p>\n

 <\/p>\n

\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cMFA believes the Commission is seeking increased information and transparency between funds and investors, and this Proposed Rule could inadvertently disadvantage investors who are seeking information about a fund prior to making an investment,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d Mr. Gaine added.<\/p>\n

 The full text of MFA\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s comment letter is posted at: www.mfainfo.org<\/a><\/p>\n

            MFA, headquartered in Washington, DC, is the primary trade association representing professionals who specialize in alternative investment strategies including hedge funds, funds of funds and managed futures funds. MFA\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s over 1,300 members are affiliated with the majority of the 100 largest hedge funds, which manage a significant portion of the over $1.4 trillion invested in hedge funds. Since its inception in 1991, MFA has provided industry leadership in government relations, communications, media relations, and education to MFA members and investors.<\/p>\n

 <\/p>\n

\n

For further information:               <\/span><\/p>\n

\n

John G. Gaine
                                                 <\/span>President
                                                 <\/span>Managed Funds Association
                                                 <\/span>(202) 367-1140<\/p>\n","protected":false},"excerpt":{"rendered":"

HedgeCo.net – WASHINGTON, D.C., March 12, 2007 — Managed Funds Association (MFA) submitted a comment letter to the Securities and Exchange Commission (SEC) on Friday, March 9,2007 in response to its request for comments regarding its proposed rules on \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cAccredited […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-5790","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/5790","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=5790"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/5790\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=5790"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=5790"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=5790"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}