Post by jannikki on Feb 5, 2007 18:51:16 GMT -4
SEC Hedge Fund Registration: Investors Are Livid
Posted on Feb 5th, 2007
Christopher Holt submits: Looks like John Mauldin’s call to arms against the new SEC hedge fund rule is working. Individual investors are livid since, in many cases, they will no longer be allowed to invest in their favorite hedge funds. But are we all playing right into the SEC’s hands?
Neal Lipschutz of Dow Jones reports:
“It is early days in the public comment period, which runs until March 9, and the number of responses and their overall tenor may well change. But it’s clear the SEC hit a nerve.
“‘It does not make sense to raise the minimum assets for investors in hedge funds and thereby [eliminate] more middle-class Americans from potential opportunities,’” another e-mail to the SEC reads in part. ‘Our society is already stacked unfairly in favor of the rich and wealthy.’
“‘A third correspondent said his job requires him to put together business deals worth tens of millions of dollars, ‘and yet, my government is regulating my ability to invest in hedge funds–why?’”
But his article ends with a curious observation:
“The SEC’s initial idea was to require hedge fund managers to register with the agency. When a court threw out that rule, it was back to the drawing board. The greater restriction on who can invest was one plan to emerge from the rethinking.”
The new restrictions “emerged from the rethinking“? So let me get this straight: the SEC tries to get everyone to register - fails - rethinks - and then gives up on that goal entirely in favor of a totally new objective of shutting out over 80% of currently eligible hedge fund investors?
It’s becoming clear to us, as it may be to you, that the SEC may be executing a calculated gambit to get the industry (and investors) onto the registration bandwagon. Is it only a matter of time before the SEC says “Well, okay. You middle-income guys can invest in hedge funds. But your manager needs to be registered.”?
And with that, will they introduce a form of registration for funds accepting money from those middle class investors who got shut out (perhaps Mauldin’s “HFIC”)? If they do, we’ll all end up thanking the SEC for the very thing the industry railed against in 2006. Very smooth…
Then again, maybe we’re giving the SEC too much credit. But what else would explain such a seemingly goofy plan?
seekingalpha.com/article/26027
Posted on Feb 5th, 2007
Christopher Holt submits: Looks like John Mauldin’s call to arms against the new SEC hedge fund rule is working. Individual investors are livid since, in many cases, they will no longer be allowed to invest in their favorite hedge funds. But are we all playing right into the SEC’s hands?
Neal Lipschutz of Dow Jones reports:
“It is early days in the public comment period, which runs until March 9, and the number of responses and their overall tenor may well change. But it’s clear the SEC hit a nerve.
“‘It does not make sense to raise the minimum assets for investors in hedge funds and thereby [eliminate] more middle-class Americans from potential opportunities,’” another e-mail to the SEC reads in part. ‘Our society is already stacked unfairly in favor of the rich and wealthy.’
“‘A third correspondent said his job requires him to put together business deals worth tens of millions of dollars, ‘and yet, my government is regulating my ability to invest in hedge funds–why?’”
But his article ends with a curious observation:
“The SEC’s initial idea was to require hedge fund managers to register with the agency. When a court threw out that rule, it was back to the drawing board. The greater restriction on who can invest was one plan to emerge from the rethinking.”
The new restrictions “emerged from the rethinking“? So let me get this straight: the SEC tries to get everyone to register - fails - rethinks - and then gives up on that goal entirely in favor of a totally new objective of shutting out over 80% of currently eligible hedge fund investors?
It’s becoming clear to us, as it may be to you, that the SEC may be executing a calculated gambit to get the industry (and investors) onto the registration bandwagon. Is it only a matter of time before the SEC says “Well, okay. You middle-income guys can invest in hedge funds. But your manager needs to be registered.”?
And with that, will they introduce a form of registration for funds accepting money from those middle class investors who got shut out (perhaps Mauldin’s “HFIC”)? If they do, we’ll all end up thanking the SEC for the very thing the industry railed against in 2006. Very smooth…
Then again, maybe we’re giving the SEC too much credit. But what else would explain such a seemingly goofy plan?
seekingalpha.com/article/26027