U.S. Chamber Opposes Proposed SEC Rules for Hedge Funds

WASHINGTON, D.C. – The United States Chamber of Commerce, in comments submitted to the SEC today, called the agency's proposed changes to rules governing hedge fund advisers an unnecessary and overly broad answer to a problem that has yet to be adequately defined.

"An ill-advised rush to regulate by the SEC could have significant unintended consequences to the strength of the capital markets and more importantly, to our overall economic health," said David Hirschmann, Chamber senior vice president.

The Chamber's comments on hedge fund regulations come on the heels of the business organization's lawsuit against the SEC over a rule which would require mutual fund boards of directors to have an independent chairperson and that 75 percent of the directors be independent as well.

There are significant dangers to regulating an entire industry simply because of its size or the potential for a problem, according to the Chamber. While the SEC has argued that it needs more information on hedge fund operations, the agency failed to consider less onerous means of gathering that critical background material before proposing the current rules, including obtaining access to information already made available by hedge funds to other government agencies such as the Treasury or Federal Reserve.

Additionally, the Chamber's comments charge that the SEC's assertion that the mandatory registration component is vital to broader investor protection is overstated and that the agency failed to comprehensively consider the costs and consequences the proposed rule would have on U.S. capital markets if implemented.

The United States Chamber of Commerce is the world's largest business federation, representing more than three million businesses of every size, sector and region.

View SEC Comments

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04-125