>The Alternative Investment Management Association (AIMA) made the assertion Thursday in a letter sent to the US Securities and Exchange Commission (SEC), which has proposed requiring most hedge fund advisors to register with the commission (See SEC Staff Formalizes Hedge Fund Recommendations ).
>Causing hedge fund managers domiciled or primarily doing business in another country to register in the US would have a ” considerable and onerous likely impact on non-US fund managers and other interested parties, in terms of additional and significant regulatory burden and costs, ” AIMA wrote.
“We havesubmitted that local regulators, who are in constant contact with local industry practitioners and service providers, are in a better position to regulate and perform supervisory examination,” AIMA officials wrote. “We have also suggested that the SEC might learn more about the global hedge fund industry by continued cooperation and sharing of knowledge between established regulators already supervising this industry.”
“If the SEC were to have the power to make examinations, we anticipate that your already strained resources would be further severely stretched,” AIMA continued. “Having regard to how hedge funds are structured and that they operate in varied ways, sometimes with subtle variations, from jurisdiction to jurisdiction, we submit that the local regulators, who are in constant contact with local industry practitioners, including industry service providers, are in a better position to regulate and perform such examinations.”