WEST PALM BEACH, FL (HEDGECO.NET) – The SEC office has received a number of observations regarding hedge fund regulation. According to published reports, ten remarks have been received fromindividuals relating to the hedge fund regulations. Of the ten comments received, seven of those support SEC�s controversial hedge fund reform initiatives. However, no comments have been received sofar from trade organizations or other high profile individuals.
Alex M. Paul from a Chicago based hedge fund firm, New Salem Capital LLC describes the new hedge fund initiative as a good start, expressing satisfaction that the new regulations will help to check hedge funds. Nonetheless, according to reports, Mr. Paul expressed hopes that his firm be exempt from this regulatory oversight. Paul said, “The regulatory net often encompasses more than it needs to,” making a case for an exemption for his firm.
Paul also suggested that the new proposals should also exempt small companies with fewer than 50 clients from registration, even if the firm is managing more than US $30 million in assets.
Another comment raised questions over the extra-territorial effect of the new proposals, on US based offshore advisors, suggesting that advisors without US investors should be exempted from this oversight. Mr. Paul added, “since the purpose of the regulatory initiative is to protect investors in these products and discourage fraud, it would be great if the registration rules could somehow allow existing hedge funds that have fewer than say 50 clients …to register voluntarily, even if they are over the $30 million asset threshold. Or, perhaps, insiders’ money should not be counted toward this total.�
The comment stage lasts through September 15, 2004, after which the SEC commissioners will undertake a final vote over the matter.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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