MFA Asks SEC To Re-Examine Hedge Fund Registration Plan

by Glen Shapiro, LawAndTax-News.com, New York

21 October 2004

US hedge fund industry lobbying group, the Managed Funds Association (MFA) has urged the Securities and Exchange Commission (SEC) to consider other ways of increasing oversight of the currently lightly regulated industry, it emerged recently.

Under the securities regulator's proposed plan of action, hedge funds with $25 million or more under management and upwards of 15 clients would be obliged to register with the agency.

However, in a statement released on Monday, the MFA revealed that of the approximately 125 letters sent to the SEC following its announcement of a sixty-day comment period on the issue, around 73% were opposed to the registration plan, arguing that it may constrain or otherwise harm the burgeoning industry.

Alternative suggestions put forward by interested parties which would serve the same purpose of increasing disclosure within the industry included:

• Asking the President's Working Group to evaluate currently available information on hedge funds in order to ascertain ways in which it can be shared with regulators;
• Increasing the threshold for investment in hedge funds; and
• Obliging hedge funds to submit to yearly audits, with the results to be made available to investors.

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