WEST PALM BEACH, FL (HEDGECO.NET) – The Securities and Exchange Commission passed the hedge fund regulation proposal vote two weeks ago on a split 3-2 vote. As expected, the SEC Chairman, WilliamDonaldson joined the two Democratic members in voting affirmatively for new rules for hedge funds, while the two republican members opposed the proposal.
In explaining why he favors this idea, Mr. Donaldson said, “The hedge fund industry is a one-trillion dollar corner along Wall Street with warning signs flashing at us, we simply can’t afford to walk by and ignore it.� He argued further that hedge funds have increasingly become popular for ordinary investors through pension plans and little is known about them.
Two SEC Commissioners, Paul Atkins and Cynthia Glassman, who voted against the proposal, will be drafting their dissent letter spelling out why hedge fund regulation should not happen. Mr. Atkins said, “We will issue a dissent… [in which] we’ll be posing additional questions.� The dissent letter, according to Atkins, is similar to dissent documents issued following court decisions. This opportunity will enable them to formalize their opposition for public records.
Atkins further said, “I think there is a lot of work that needs to be done that the Commission and the staff have not done as far as�what information the government has and what information we need to do our job.� He added, “I don’t think the case has been made that regulation is the answer.�
Cynthia Glassman, the second commissioner who voted against the proposal said, “Majority rules, I’m hoping we get some good comments on alternatives [to the plan]. I’d be interested in hearing from [investment banks] about what impact they see,” she added. Atkins has also expressed hope that members of the hedge fund industry will make their feeling about the matter known. Atkins added, “I hope to hear a lot of comments from the people who will be affected by the rule.�
The SEC commissioners will undertake the final vote on the matter after September 15.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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