Saturday, 26 July 2014
Last updated 14 hours ago
Mar 15 2007 | 11:44am ET
The head of the House Financial Services Committee held a hearing on hedge funds yesterday, and got an earful.
Rep. Barney Frank (D-Mass.) said at the hearing he has not decided whether to seek hedge fund regulation. But the voices testifying assured lawmakers that hedge funds do not present and undue risk to pensioners and the financial system.
“If a hedge fund blows up, there will be another hedge fund that will provide the shock absorber,” said George Hall, founder of hedge fund Clinton Group.
Others, including Taconic Capital Partners’ Kenneth Brody and Kynikos Associates’ James Chanos, backed mandatory registration, á la the Securities and Exchange Commission’s tossed rule.
“I believe mandatory registration is a good policy,” Brody said. “What registration primarily provides is a self-discipline and a self-policing.”
Chanos concurred, though he suggested a somewhat less-onerous process than that used by the SEC: a census-like system, simply asking for a fund’s name, location, assets under management and auditor. And Chanos urged the panel not to focus exclusively on hedge funds, saying that all alternative investments should be treated the same.
“[There should be] a focus on the activity, not the actor,” he recommended.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…