SEC Pulls Trigger on Registration

By Collins, Daniel P. | Futures (Cedar Falls, IA), September 1, 2004 | Go to article overview
Save to active project

SEC Pulls Trigger on Registration

Collins, Daniel P., Futures (Cedar Falls, IA)

One day after the Securities and Exchange Commission voted to propose a requirement that hedge fund managers must register with the SEC under the Investment Advisers Act of 1940, the Senate Banking Committee held hearings in which a compromise was suggested in this heated debate.

James Chanos, president of short selling fund Kynikos Associates LP, suggested the SEC impose rules to obtain the information it needs to understand the industry better and allow it to protect investors but allow hedge funds to retain their exempt status.

Hedge fund managers would retain the exemption contingent on the SEC receiving the information it wants. Among other requirements, funds would certify minimum investor qualifications and have an annual audit conducted by an independent auditor and adopt written supervisory procedures and objective and transparent valuation standards.

"We believe our suggestion will reduce the risk of undue reliance by investors on SEC oversight, conserve important SEC resources and reduce the risk that registration will grow, over time, into a creaky and burdensome form of regulation," Chanos told the committee.

Under the proposal fund managers registered with the Commodity Futures Trading Commission as commodity pool operators or commodity trading advisors would not need to be certified. CFTC General Counsel Pat McCarty testified that CFTC registrants should not face dual registration, pointing out that more than 50% of hedge funds with more than $1 billion under management have CFTC reporting requirements.

Much of the criticism of registration centered on an apparent disconnect between SEC goals and what registration is likely to accomplish. Chanos' recommendations will provide the SEC with the information it seeks without the promise of protection the SEC has already shown it cannot deliver.

With both sides of the issue digging in their heels, a compromise allowing the SEC to save face would make sense.

Comparing index returns

                                June    YTD

S & P 500 Total Return Index    +1.94%  +3.44%
Lehman Brothers Treasury Index  +0.74%  +0.10%
Morgan Stanley EAFE Index       +1.99%  +3.04%
Futures Public Funds (June)     -4.28%  -8.25%

June's top CTAs

                                          June     YTD

Barclay CTA Index                         +2.08%   -1.80%
Barclay Sub-Indexes:
Agricultural Traders                      +2.03%  +14.24%
Currency Traders                          -0.99%   -3.18%
Diversified Traders                       -3.56%   -4.30%
Financials and Metals Traders             -1.26%   -3.26%
Discretionary Traders                     -0.13%   +3.76%
Systematic Traders                        -2.90%   -4.57%

More than $10 million under management
1. Beacon Mgmt. Corp. (Meka)              +7.38%   -6.01%
2. Northbridge Capital (Sigma 3X)         +5.04%   +5.71%
3. Oxeye Capital Mgmt. Ltd.               +4.60%  +22.31%
4. Vega Asset Mgmt. (Select)              +4.40%   +8.89%
5. Global Advisors L.P. (Discretionary)   +4.05%  +18.54%

Less than $10 million under management
1. CKP Associates                        +35. 

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

SEC Pulls Trigger on Registration


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?