SEC preparing to register hedge funds.(Managed Money Review)(Securities and Exchange Commission)

Futures (Cedar Falls, Iowa), April, 2004 by Collins, Daniel P.

The Securities and Exchange Commission took a step closer to requiring hedge fund managers to register despite differing opinions within the agency. Chairman William H. Donaldson, in a March speech, said the SEC staff is "preparing a proposed rule ... to register hedge fund managers as investment advisors."

The speech came on the heels of public statements opposing registration by SEC Commissioners Cynthia Glassman and Paul Atkins. Both commissioners questioned the need of such regulation and cautioned it could dilute regulatory resources to protect retail investors.

While Donaldson points to participation of hedge funds in the recent scandal involving market timing and afterhours trading as justification for registration, it wasn't the SEC that...

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