The lobbying group for U.S. hedge funds has asked the Securities and Exchange Commission to figure out a way to regulate the industry without making registration with the Commission mandatory, The New York Post reports.

In a letter to the SEC, the Managed Funds Association said it wouldn’t mind if the Commission took up alternative regulatory actions, such as making it more difficult for investors to buy into hedge funds.

"In light of the division within the Commission, the lack of support by the President’s Working Group on Financial Markets, and the fact that no public policy cases have been made to support the proposed rule, the SEC should at the very least consider these alternatives," said the association.

The rule proposal, which was voted in 3-2, would force all hedge funds with $25 million or more and 15 or more clients to register as investment advisors. Half of the nation’s hedge funds, according to estimates, are already registered.

The divided Commission that the association referred to lies in the fact that the two Democrats on the Commission and Republican Chairman William Donaldson voted for the proposal, while the other two Republicans voted against it. Donaldson has voted along with the other Democrats on several other measures, angering much of his conservative base.

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