Saturday, October 29, 2005

SEC To Relax Registration Requirements for Hedge Fund Managers?

Last year, when the SEC adopted rules to require the managers of certain hedge funds to register with them, a number of commentators, myself included, criticized the Commission for its decision, and for the rationale behind it. My comments are available here.

One problem was how in the world was the SEC going to monitor and inspect all of those hedge fund managers when it couldn't effectively monitor the broker-dealers, mutual fund companies, investment advisors, and public companies that it is currently responsible for monitoring?

Well, as the effective date for registration is approaching (it is February 2006) the press is starting to report that the Commission is having second thoughts, and is considering relaxing the registration rules to be less inclusive, and to limit the number of managers who are effected by it.

The problem? Apparently they suddenly realized that they would not possibly be able to effectively deal with all those hedge funds.

Surprise!

Article here and here.
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