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MFA to SEC: Clarify hedge rules

Date: Thursday, August 10, 2006
Author: Riva Froymovich, Investmentnews.com

The Managed Funds Association wants more "regulatory certainty" from the Securities and Exchange Commission regarding hedge funds, according to published reports.

Following the SEC's June decision to accept a court ruling that said hedge fund operators do not have to register with the regulator, the Washington D.C.-based group wrote a letter to Andrew Donohue, director of the SEC's investment management division in support of recommendations by an American Bar Association subcommittee aimed at helping advisers with their registration and de-registration needs.

The recommendations ask that the SEC clarify requirements for offshore advisers and spell out to those who de-register by Feb. 1, 2007 that they will be excused from advisory requirements.

It also calls on the SEC to protect advisers who expected to provide audited financial statements after the end of the fiscal and therefore did not send quarterly statements to investors this year, reports said.

The bar group also wants the regulator to state that the exemption that allowed advisers to receive performance-based compensation from some customers remains in effect.

SEC chairman Christopher Cox has said that his staff would announce guidance as early as this week, according to reports.