|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
The Cost To Comply
Staff Writer
Securities Industries News. December 6, 2004
_________________________________________________________________________
EXCERPT: The ink on the Securities and Exchange Commission's final rule on hedge fund managers was barely dry as market players gathered at a Securities Industry Association (SIA) event to swap interpretations and discuss the implications of greater regulation. The price tag for compliance was uppermost in the mind of panelists and attendees at an SIA hedge fund conference held last week in New York, where the SEC's initial estimate of $50,000 a year was quickly debunked by panelists and attendees. There is just too much to do and too few who know how to do it, many said, with some citing a figure of at least double that amount. Unlike traditional investment managers, who wised up years ago, hedge fund managers are only just waking up to the need for automated procedures and standardized record keeping. Even so, only the largest hedge funds-$50 million in assets is considered a minimum-can afford in-house systems, and many will be forced to outsource as a last resort, even though outsourcing doesn't absolve them of legal liability. "The costs related to adviser registration is disputed, and there is a lot of discussion on estimates," said Michael Butowsky, a partner with the law firm of Mayer Brown Rowe & Maw who moderated an afternoon panel on the business impact of hedge fund registration at the SIA event. The SEC sees intervention as a logical approach, given the growth of the hedge fund industry and recent well-publicized fiascos. Only about 30 percent of the estimated 6,000 or 7,000 hedge funds operating in the U.S.-with some $600 billion in assets under management-are registered. In the next 5 to 10 years, that figure is expected to exceed $1 trillion. |
|
|
