WASHINGTON — The hedge fund industry is certain the SEC will begin this week to tighten controls on hedge funds.
The question is how far the Securities and Exchange Commission's regulatory zeal will go and how long it will take to get there.
One faction of observers wonders how much time it will take Chairman William H. Donaldson to get proposed hedge fund regulation changes past other SEC commissioners, especially given widespread industry and market opposition.
Others predict fast action. "Before Labor Day, the hedge fund industry will have its marching orders. We'll know what the regulations are going to look like," said Leighton Strader, managing partner with hedge fund consultant Virginia Ventures LLC, Williamsburg, Va. "It's clear that he (Mr. Donaldson) just wants to get this done."
At the top of the agenda for the SEC's July 14 meeting, according to its website, is consideration of a mandatory requirement that certain hedge fund managers register as investment advisers.
That same requirement is at the top of the hedge fund industry's objections to the SEC's efforts to regulate its activities.