Sooner or later, hedge funds will be regulated, despite a U.S. court decision blocking the Securities and Exchange Commission from overseeing them, according to Bloomberg columnist Chet Currier. The $1.2 trillion hedge fund business has not escaped from regulators, but only postponed regulation, he said. And if Congress decides to handle it, they will be sorry they hadn't let the SEC do its job.
Increased scrutiny of hedge funds has begun even without the SEC regulation. Morningstar has started tracking investment results and fees at 3,000 of the estimated 8,000 hedge funds. Hedge funds are facing increased pressures from their growing pension plan and institutional investor customer base that
operates under the strictures of fiduciary responsibility.
Regulation is seen as costly and intrusive, but possibly hedge fund managers themselves will see it as beneficial. A key first step in any workable system for regulating hedge funds is to define the term and to draw a line of separation between private individual investors and a hedge fund manager.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.