Tuesday, August 14, 2007

No To Hedge Fund Regulation

Commissioner Atkins of the SEC, in a recent speech, spoke about hedge fund registration. Commissioner Atkins was one of the two Commissioner who dissented from the hedge fund manager registration rule last year.

For more background, see Registration of Hedge Fund Managers - Bureaucracy without Benefit. Commissioner Atkins repeats many of his original comments. One significant comment which bears repeating, is that the SEC simply cannot afford to oversee any more entities.

Many commentators, including myself, noted that the Commission was already having difficulties regulating the brokers, mutual funds, public companies and investment advisers that it was already responsible for. It simply did not make sense to add more regulations which were of dubious value, to an already burdened agency.

Commissioner Atkins made an additional point. Hedge fund investors, "including the likes of Rupert Murdoch and Rupert Johnson, George Soros and George Lucas, Michael Bloomberg and Michael Milken" don't need the SEC to hold their hand or to protect them. Hedge fund investors are institutions or wealthy individuals. They have the financial acumen to look out for themselves or to hire someone to do it. They have the wealth to enable them to sustain a loss, and they have the knowledge and funds to sue the whomever is responsible should there be a fraud or other misconduct.

Commissioner Atkins also discussed the proposed changes to the accredited investor definition, the misguided attempt to exclude venture capital funds from regulation, and the status of the SEC's efforts to effectively monitor private funds.

The text of the speech is at http://www.sec.gov/news/speech/2007/spch080207psa.htm
Post a Comment