Hedge fund body says 100% hedge fund registration unnecessary

The Managed Funds Association (MFA) believes the current level of regulatory oversight of hedge funds is sufficient. The claim was made in response to the Securities and Exchange Commission (SEC) floating the idea of requiring all managers to be registered as investment advisers.

The Washington DC-based lobby group’s president John Gaine said the MFA would continue its dialogue with the US regulator. However, according to the MFA, requiring all hedge funds to register would place a "significant and unnecessary burden on the SEC, as well as investors".

The idea of requiring registration of all managers was included within the SEC’s staff report, entitled ‘The Implications of the Growth of Hedge Funds’, released on Monday. The authors said many of their concerns arose from the unregulated status of hedge funds, and they identified their “primary recommendation” as asking the SEC to “consider revising its rules” to require hedge fund advisors register under the Investment Advisers Act. The SEC’s chairman, William Donaldson, said the report was “particularly important”, given the substantial growth in hedge fund assets and the SEC’s lack of information about this kind of investor.

Founded in 1991, the MFA is a trade association that represents investors within the hedge fund, futures fund and broader alternative investment community. It currently has around 700 members.