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Hedge Fund Association Voices Opposition to Potential SRO

HFA warns that potential hedge fund self-regulation organization (SRO) under investigation by the GAO would raise regulatory costs for funds to operate and also limit the industry's growth.

issued a press statement voicing its opposition to the creation of any hedge fund self-regulatory organization, citing regulatory cost and suppression of entrepreneurship in finance.

The feasibility and benefits of creating such an organization are currently under investigation by the Government Accountability Office (GAO) in accordance with Title IV, Section 414 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, according to the HFA statement.

In our discussions with the GAO, the Hedge Fund Association has let it be known that we stand in firm opposition to any potential hedge fund SRO,” stated David Friedland, president of the HFA and president of Magnum U.S. Investments, Inc. “In light of the new registration requirements imposed by the Dodd-Frank Bill we believe that any SRO would prove to be entirely redundant and represent yet another regulatory cost that will suppress industry growth.”

According to Ron Geffner, VP of the HFA and partner at Sadis and Goldberg, LLP, in the sane press statement, “Hedge funds still represent the best outlet for entrepreneurship in the financial industry. By continuously raising the regulatory costs for a fund to operate, the government is making it harder and harder for smaller fund managers to stay in business.” Geffner further stated, “It is the HFA’s mission to speak up for the hedge fund industry and for entrepreneurship in finance. This is why we simply cannot stay silent when such a potentially damaging provision is still under consideration by regulators.”

The HFA urges regulators to limit hedge fund regulation to the currently established registration requirements and abandon any consideration of an SRO, in the press statement. The HFA also calls up on all hedge fund industry participants to join them “in their stand against what could potentially be another wave of costly and redundant regulation,” states the association.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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