Manager reaction to a report by U.S. Securities and Exchange Commission staff with recommendations for new hedge fund regulations was mainly a big yawn, at least from larger managers, hedge fund-of-funds companies and their omnipresent attorneys.
"The devil is in the details, but the report and its recommendations were generally positive for the industry," said John Kelly, president and chief executive officer of Man Investments, Chicago. "The document reflects pretty fair research. The SEC went into this with an open mind and did not try to fit facts to an idea they had etched in their minds."
"The SEC's response to public and industry comment was measured, reasonable," said Anne Casscells, managing director at hedge fund-of-funds manager, Aetos Capital Management, New York. Ms. Casscells said Aetos already is registered as an investment adviser — one of the SEC's recommendations for all or most hedge fund managers — and so would not be affected much by proposed rule changes.
"The code of ethics proposed is a good thing, not too heavy a requirement. We feel we should be doing these things, anyway. They are the right thing to do," she said.
"It's not a horribly negative result," said Jeffrey R. Blumberg, an associate at Chicago law firm Gardner Carton & Douglas LLC. "The proposals are somewhat excessive, but even by adding additional layers of regulation, it won't be the silver bullet they want. Any managers that want to commit fraud can do so, and it will be very hard for a routine SEC audit to catch them."