WASHINGTON, D.C. (HEDGECO.NET) – The Chairman of the Federal Reserve Bank, Alan Greenspan, has appeared numerous times before the US congressional committees in testimonies over the SEC�s proposalsto regulate the US based hedge funds. So far, such testimonies have not swayed any minds. In his latest appearance, Greenspan told the US Senate Banking Committee Chairman Sen. Richard Shelby ofAlabama that hedge funds do not need additional regulations. Greenspan also gave similar answer to a query from another member of the Senate Banking Committee, Senator Mike Crapo.
According to Greenspan, �Institutional investors have accounted for a growing share of hedge fund investments, and they can and should protect their own interests rather than rely on the limited regulatory protections that would be provided as a result of a registration requirement.”
Greenspan also told Senator Crapo, “The proposal seeks to deter fraud and market manipulation, but it is unlikely to achieve those objectives.” if such objectives aren’t met, Congress could face “irresistible” pressure to expand the SEC’s regulatory reach from hedge fund advisers to “hedge funds themselves.� according to him.
But such testimonies appear not to have swayed the minds of the lawmakers yet, according to analysts, who cited increasing investments into hedge fund instruments coming from institutional investors particularly the pension plans and endowments. Such new investments have benefited the fund of funds category in particular, which are growing at an exponential rate.
There is increasing skepticism whether the Fed. Chairman will succeed in convincing the congressional panel on the need to leave the industry unregulated. There is also a likelihood that this matter could drag on for a longer period, as the lawmakers appear not in a hurry to make recommendations over the issue.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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