WEST PALM BEACH, FL (HEDGECO.NET) – The SEC Chairman, William Donaldson wants hedge fund advisors to have proper accounting and value their assets properly, in the same way US mutual fund companiesare expected to �fairly value their portfolio holdings.� Donaldson refutes assertions that the SEC�s mandate is to protect the 92 million US mutual fund investors. �We’re here to protect theindividual investor,” he said. He added, �That doesn’t mean if there are frauds being perpetrated on wealthy investors we shouldn’t step in.”
Donaldson defended his proposals to regulate US hedge fund advisors. He contends that, a large number of ordinary US investors are increasingly investing with hedge fund managers through fund of hedge funds managers, as well as through pension plans and retirement accounts.
According to published reports, democratic members of the SEC board agreed with Donaldson while republican members remain opposed to the hedge fund regulatory oversight. The SEC Commissioner, Paul Atkins said, “I’m not convinced this is a wise use of our resources, I think we need to focus more on the mutual fund area.�
The Chairman of the US Federal Reserve Bank, Allan Greenspan is also on record as opposing such regulatory oversight for the US hedge funds. Greenspan said he is concerned that such regulation might harm the liquidity of the US financial markets, and also undercut the role of risk hedging guaranteed by hedge funds.
Donaldson, however, is still committed to his objective, explaining to reporters that he has known Chairman Greenspan for quite sometime, and has high regards for him. However, regarding hedge fund issues, Donaldson is resolved to pursuing such regulation regardless.
Donaldson said, “When push comes to shove, we have different responsibilities.� He added, �What they’re interested in is something quite different than what we’re interested in.� The vote for this initiative is expected in mid-July.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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