Many funds plan to retain compliance practices
The U.S. Securities and Exchange Commission’s short-lived effort to require hedge fund registration may end up improving hedge fund industry compliance, even though the requirement was struck down, suggests new research from Greenwich Associates.
Greenwich reports that, despite the fact that nearly 20% of the registered hedge funds participating in its recent study plan to de-register in the wake of a federal appellate court ruling striking down the SEC registration order, a larger proportion of hedge funds said they plan to retain new compliance processes, practices and staffing implemented in order to meet registration requirements.
More than 30% of the hedge funds surveyed by Greenwich Associates said that, in order to comply with the original SEC registration requirement, they expanded staffing, largely in their compliance departments. “For most funds, increased staffing was only part of the changes brought on by the regulator,” says Greenwich Associates consultant Peter D’Amario. “Hedge funds also upgraded technology, implemented operational ‘best practices’ and initiated compliance monitoring procedures.”
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