The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Hedge funds register scorn at SEC ruling

The SEC doesn't know how many hedge funds there are and distrusts their secretive ways. Its ruling that they should register with it has prompted claims that it is ultra vires, will raise costs to unsustainable levels and reduce the competitiveness of onshore US funds. Unsurprisingly some funds are seeking ways to sidestep the requirement.

feature-01-01.gif

ON APRIL 14, PHILLIP Goldstein will submit the first brief to court outlining his case against the SEC's new ruling requiring hedge fund managers to register. Goldstein, president of Kimball & Winthrop, investment managers for Opportunity Partners, a relatively small $82 million hedge fund, will argue that the SEC, as an agency, does not have the power to alter or make law.

The majority of hedge fund managers will be crossing their fingers for him – it's hard to find an unregistered manager who supports the ruling. Some are leaving it to Goldstein to fight their battle but other hedge fund managers are staging their own protests.

Whether because they deem the ruling superfluous, a cost burden or, as the Goldstein camp suggests, unlawful, many hedge fund managers have decided that they will not be registering in the next 11 months. Instead, some US managers are now considering moving offshore or altering the terms of their funds to dodge registration. Even foreign fund managers, with their "SEC-lite" registration requirements, are boycotting the ruling by shunning US investors.

It's a blow to the SEC, which has promoted the ruling as being positive for US investors, and a way of obtaining more information about the secretive hedge fund industry.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree