WEST PALM BEACH, FL (HEDGECO.NET) – The debate over the controversial SEC hedge fund regulation initiative is continuing as both sides seek to influence the final outcome of the debate. A few weeksago, a divided Securities and Exchange Commission voted in a split decision in favor of regulating the US hedge fund industry. A New York hedge fund attorney, Michael Tannenbaum has added his voiceto the debate and according to him, the new proposals will not necessarily protect investors.
According to Tannenbaum, “If the Commission does not back up the registrations with the resources to monitor the funds, then the registration is going to be misleading to investors.� He argued further that, “It is too early to tell if the Commission has the resources to monitor all of the managers that register.”
The SEC has said in numerous occasions that it lacks adequate manpower and resources to fully carry out its duties. With the addition of more responsibilities it is difficult to imagine how the SEC could cope with an increased workload. Currently, there are estimates of over 7,000 hedge fund companies operating in the United States, managing over US $800 billion in assets.
According to published reports, from the Government Accounting Office, the SEC was only able to review 23 % of all the corporate fillings in 2003. With the addition of another 7000 files, the possibility of the SEC handling this workload is even more difficult to imagine. A number of hedge fund market analysts think the likelihood that the SEC commissioners will reverse on hedge fund regulation proposals is minute as the September 15 deadline for the final vote draws nearer.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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