Hedge Funds Predict Victory Against Proposed Regulation

June 16, 2004, 1:00 a.m. EDT 1 Min Read

The Managed Funds Association (MFA) believes it has the necessary backing from regulators and government insiders to turn back proposed regulations aimed at bringing hedge funds under the laws of registered investment advisors, TheStreet.com reports.

The MFA, which is the largest hedge fund industry trade group, claims to have the backing of Federal Reserve Chairman Alan Greenspan, House Financial Services Committee Chairman Michael Oxley (R-Ohio), Commodity Futures Trading Commission Chief James Newsome and at least two of the five commissioners at the SEC in its fight to beat back SEC Chairman William Donaldsons push to regulate hedge funds.

The hedge fund industry has aggressively championed the case for keeping hedge funds independent from regulations applying to other types of managed assets, such as mutual funds. Adam Cooper, MFA chairman and general counsel for Citadel Investment Group, one of the countrys top five hedge funds in terms of assets under management, reiterated that the MFAs position is the best course for hedge fund investors and vowed larger efforts aimed at bringing the message to lawmakers through media interviews and lobbying activities.

MFA President Jack Gaine also noted that the hedge fund industry should head off additional regulation by providing investors with greater transparency and disclosure. These messages put the MFA directly at loggerheads with Donaldson, who in recent months has pledged greater regulation for hedge funds as part of a broader effort at bringing the financial services industry out from this period of widespread scandals.
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