SEC: May Know In 9-12 Mos If More Hedge Fund Regs Needed
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By Andrew Dowell
Of DOW JONES NEWSWIRES
MINNEAPOLIS (Dow Jones)--The Securities and Exchange Commission is poring over information in registrations filed by hedge fund advisers and should know within a year whether more regulation of the industry is needed, Chairman Christopher Cox said Monday.
"Within nine to 12 months, I expect that we will be able to internalize some of this information and be able to infer" whether further regulation may be needed, Cox said in comments to a gathering of business journalists.
The number of hedge fund advisers registered with the SEC has doubled since the commission made it mandatory for some. The commission is now training staff to inspect advisers, now that they have the authority to do so, Cox said.
The SEC's increasing interest in hedge funds comes as their activity has exploded amid an inrush of funds from pension funds and other institutional investors seeking better returns than those afforded by traditional investments in stocks and bonds.
The registration regulation, which took affect Feb. 1, doesn't require disclosure of any information related to hedge funds' strategies. Cox said the regulation has produced "census information."
On the issue of better disclosure of executive pay, another SEC initiative, Cox said investors need to know how much companies pay some of their non-executive employees. The entertainment industry in particular has complained about an SEC proposal to require such disclosure.
While Cox acknowledged there are good arguments on both sides of the issue and that the SEC is open to revising the proposed rule, he said that without such disclosure, an investor may conclude that "I'm going to have a pretty serious problem trying to understand the whole picture."
Cox also said the SEC is considering whether to routinely disclose more information on its own initiative due to a growing backlog of requests under the Freedom of Information Act. Those requests are being driven by commercial services, cox said.
-By Andrew Dowell, Dow Jones Newswires; 201-938-5175; andrew.dowell@dowjones.com
(END) Dow Jones Newswires
May 01, 2006 13:20 ET (17:20 GMT)
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