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Against the backdrop of difficult market conditions and growing investor…
18/01/2012
Inaccurate information and misperceptions about hedge funds could be swept aside if the SEC was to overturn a ban on the US industry soliciting and advertising its services, according to the president of the US Managed Funds Association (MFA) Richard Baker.
By banishing or amending current restrictive marketing regulations, the SEC would “enhance the regulation of private fund offerings and fulfil the objectives of executive order,” Baker said in a letter to the SEC.
Specifically, it would reduce legal uncertainty arising from the current regulation; increase the transparency of the hedge fund industry “in a manner consistent with the Dodd-Frank Act and recent regulatory initiatives”; facilitate capital formation; and reduce administrative costs by allowing investors to more easily obtain information about private funds.
“The lack of publically available information about hedge funds and the perception of the industry as secretive likely discourage institutional investors from allocating capital to private funds,” he said in his letter.
The implications of any such move would have a wide-spread effect both in and outside the US, HFMWeek was told. Opinion suggests that common sense and an up-to-date approach should prevail and that the MFA’s mooted increase in transparency is a good thing. But for now it remains to be seen what the SEC’s response to Baker’s quest to rid the industry of its marketing handcuffs will be.
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