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No to SRO: Hedge Fund Assocation

At Deadline

The Hedge Fund Association said it is adamantly opposed to the establishment of a self-regulatory organization for hedge funds, which the Government Accountability Office is currently investigating under the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

HFA said an SRO would be redundant and hamper industry growth and that current registration requirements are adequate

"Hedge funds still represent the best outlet for entrepreneurship in the financial industry," said Ron Geffner, vice president of the Hedge Fund Association. "By continuously raising the regulatory costs for a fund to operate, the government is making it harder and harder for smaller fund managers to stay in business. It is the HFA's mission to speak up for the hedge fund industry and for entrepreneurship in finance. That is why we simply cannot stay silent when such a potentially damaging provision is still under consideration by regulators."


12b-1 Rule Would Burden Retirement Plans: SPARK

The SPARK Institute has sent a comment letter to the Securities and Exchange Commission asking it to modify its proposed 12b-1 fee rule.

SPARK wants retirement plan funds to be able to charge up to 75 basis points, rather than only 25 BPS, under the new distribution Rule 12b-2 as long as the fund provides a breakdown between the sales and non-sales portions of the fee.

SPARK also wants administrators to have 30 months, instead of 18, after the effective date to comply or later, should it propose new rules on revenue sharing.

"As the SEC knows," the SPARK letter says, "retirement plan intermediaries perform many of the necessary recordkeeping and ongoing administration services for fund shareholders." The letter then goes on it itemize 16 functions that plan administrators perform, including maintaining shareholder identification and beneficiary designations, maintaining accurate sub-accounting records of the shares held by investors, trade settlement and clearing and transmitting proxy statements.

"The costs associated with maintaining the systems and staff required to provide the recordkeeping, administrative services and other services to comply with the SEC, Internal Revenue Service, Department of Labor and other rules that apply to retirement plan investments in mutual funds are substantia, often 50 basis points or more," SPARK says.


SEC Seeks Comment On Whistleblower Program

The Securities and Exchange Commission is seeking public comment by Dec. 17 on its proposed whistleblower' program, which falls under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under the proposed rule, no money would be awarded to a tipster unless the sanction won by the SEC exceeds $1 million, for which the whistleblower would between $100,000 and $300,000 of each million brought in by the sanction. The information must from independent, non-public knowledge.


Quote of the Week

"Pro-growth economic policies would strengthen incentives to invest in capital and labor over the horizon, paving the way for robust job creation and higher living standards."

- Kevin M. Warsh

Member, Board of Governors

Federal Reserve