WEST PALM BEACH, FL (HEDGECO.NET) – As the mutual fund/hedge fund trading scandals mark their one-year anniversary, some analysts within the US fund industry think the US Securities and ExchangeCommission may have overreacted to such abuses by proposing significant changes within both the mutual fund and hedge fund industries. Over the past year, the New York State Attorney General ElliotSpitzer, working in conjunction with the SEC authorities have collectively imposed fines and settlements totaling over $2 billion.
However, the charges of overreactions on the abuses were leveled against regulatory proposals enacted following the scandals. Amongst other controversial regulatory proposals for the US mutual fund industry, the Securities and Exchange Commission voted to require that independent outsiders head board chairmanship of mutual funds. For the hedge fund industry, the SEC passed a highly controversial proposal to subject the industry to its regulatory control.
Some industry participants think that these regulatory proposals by the SEC were an overreaction, and that prior to such rules there were many laws already existing in the books that address some of the new laws being introduced. What is lacking here, according to individuals with such views, are the will and enforcement action of the SEC.
The new regulations will bring additional cost to enforce, according to Barbara Walchli, a portfolio manager for the Aquila Funds, a New York fund group. According to her, “Those increased costs will be shared by investors, taxpayers and investment companies.�
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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