The U.S. Securities and Exchange Commission wants to reduce hedge fund fees so that more money goes to asset managers and pension funds that invest in them.
According to William Birdthistle, director of the SEC's Division of Investment Management, the American regulator is still committed to boosting sector transparency and competition. He was giving a speech in London at a Managed Funds conference.
His comments were in reference to a series of regulations that the SEC first proposed in February and then revised in August, which would alter the relationship between hedge funds and individuals who invest in them.
The SEC decided in February to adopt stricter restrictions aimed at scrutinizing the manner in which private fund advisers assess investor fees and gauge fund performance. It put forth a rule proposal in August to raise the standard of the information big hedge funds provide to it about their leverage and investment strategies.
"With fees going down that will mean more money going to end investors," said Birdthistle, adding that greater competition and transparency will result in cheaper fees and better liquidity arrangements.
When questioned if the regulator was worried about additional expenses the industry might incur, Birdthistle responded that the goal was to reduce fees and boost competition in the hedge fund market.
The planned Private Fund or heightened disclosure regulations were intended to "enhance information" and "fairness" in the hedge fund sector, although Birdthistle did not specify when they would be passed.
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