SEC Staff Plans to Recommend More Hedge-Fund Oversight
Hedge funds, which have long operated in Wall Street's shadows, are about to be dragged into the spotlight.
In a move that could have broad implications for fund managers and investors, staff members of the Securities and Exchange Commission plan to recommend that hedge-fund managers register as investment advisers with the agency, subjecting some of them to government oversight for the first time.
The step could force at least some fund managers in the lightly regulated hedge-fund world to change the way they operate. For larger hedge funds, some of whom already register with the SEC, it could signal the first step toward even more regulation by securities regulators, according to lawyers and hedge-fund managers.
Hedge funds are investment pools, mainly for rich institutions and individuals, that make big bets on global stocks, bonds and other markets. They often use leverage, or borrowed money, and other riskier techniques that mutual funds eschew.
"It's an important symbolic step for the SEC because it's indicative of the direction the SEC has been moving and intends to keep moving toward," says Jedd Wider, a partner at Orrick, Herrington & Sutcliffe LLP. "Investors will be entitled to certain information ... that they may not receive right now."
In the past few years, hedge funds have emerged as some of the most popular investments on Wall Street, largely because they have greater leeway to bet against stocks, a plus in a bear market. Though hedge-fund holdings represent less than 5% of the stock market's value, the funds recently have accounted for as much as a quarter of daily trading volume. That is because the leverage that many funds use increases the size of their bets, and because hedge fund managers tend to trade more frequently than other investors.
As the gains have piled up, a throng of new managers has jumped into the game. Some of them, however, don't allow an independent party, such as an auditor, to regularly confirm the results they boast of to potential investors.
In a report slated for release next week, the SEC staff plans to recommend rules requiring hedge-fund managers to disclose information about themselves and the funds they operate. Such registration would give the SEC the ability to conduct regular audits of hedge funds, potentially keeping a lid on fraud in the business. Currently, securities regulators can investigate hedge funds, but usually don't do anything until they receive a tip alleging some impropriety.
At the same time, some smaller hedge funds currently have a great amount of leeway in how they value their holdings, especially in markets like mortgage-backed securities where trading can be limited. The threat of regular audits by the SEC could put more pressure on these hedge funds to value their portfolios conservatively.
"Some people fudge their numbers on their monthly reports because they are just audited yearly. This could change that," says Neil Weisman, general partner of Chilmark 21st Century Capital, a New York hedge fund.
The SEC staff recommendation, which isn't finalized and could still change, has the support of SEC Chairman William Donaldson, according to people close to the matter. In the past, Mr. Donaldson has said the industry is so big that the agency needs to watch more closely what is going on at hedge funds. Other SEC officials also have been pushing for greater oversight, saying it could help combat fraud. They point to the fraudulent practices alleged by New York Attorney General Eliot Spitzer against Canary Capital Partners LLC, saying the SEC could have spotted the fraud if it had been inspecting hedge funds.
Two of the SEC's five commissioners aren't sold on the idea of registration, potentially complicating Mr. Donaldson's efforts. The two commissioners, Cynthia Glassman and Paul Atkins, have told others within the SEC that they aren't convinced registration is the right step. While the SEC only needs a majority of votes to win approval on a rule, Mr. Donaldson likes to build consensus and get unanimity on major decisions.
The two commissioners are concerned that registering hedge-fund managers could stretch the SEC's resources and hurt other efforts, such as policing mutual funds, say people familiar with the matter. There is also concern that registration could be seen as a seal of approval for hedge funds, prompting some investors to buy into funds without fully considering the risks.
At the same time, some in the hedge-fund industry said the proposal won't have much of an impact on most hedge funds other than to add to their regulatory paperwork.
Most hedge-fund managers aren't currently registered with the SEC, though some funds register with the Commodity Futures Trading Commission.
The staff report could be released as early as Monday. The recommendations were first reported by Bloomberg News. The report is expected to detail trends in the hedge-fund industry, as well as instances of fraud and other problems. The report also is expected to look at whether mutual funds should be able to employ some hedging strategies. An SEC spokesman declined to comment on the report.
对冲基金将不再神秘
一直在华尔街高深莫测地运营著的对冲基金，现在将要被拖入聚光灯下。
美国证券交易委员会(SEC)的工作人员计划提出建议，要求对冲基金经理人以投资顾问的身份在SEC登记，这将使他们中的一些人有史以来第一次受到政府的监管。此举可能会对基金经理人和投资者产生广泛影响。
对很少受到监管的对冲基金业而言，上述举措可能至少会使一些基金经理改变他们的运作方式。律师和对冲基金经理们说，对规模较大的对冲基金来说，这可能是证券监管机构朝对它们实施更多监管迈出的第一步。一些这类基金已经在SEC注册登记。
对冲基金是一种投资组合，它们主要服务于富余的机构和个人投资者，依据自己对全球股市、债市和其他市场行情的判断，进行巨额的风险性投资。它们在运作中经常使用杠杆(举债)和其他高风险技术手段，而共同基金对这类手段都是敬而远之的。
Orrick, Herrington & Sutcliffe LLP的合伙人吉德?韦德(Jedd Wider)说，这是SEC采取的一个重要的象征性步骤，因为它显示出SEC目前和今后的政策走向。他说，实施这些步骤后，投资者将有权获得一些他们目前可能无法得到的信息。
过去几年中，对冲基金已跻身于华尔街最受欢迎的投资产品之列，这很大程度上是因为它们在股市投资方面的回旋余地更大，这一优势在熊市的时候尤其显著。虽然对冲基金的股票持有额不足股市总市值的5%，但对冲基金近来的股票交易量已达到过股市日均成交量的四分之一。这既是因为许多对冲基金使用的投资杠杆增加了其投资规模，也是因为对冲基金经理人的交易频率通常要高于其他投资者。
随著对冲基金获利日丰，大量基金经理人开始投身对冲基金行业。但他们中的一些人却不允许审计师等独立人士对他们向潜在投资者所夸耀的投资业绩进行核实。
SEC的工作人员在一份定于下周公布的报告中称，他们将建议制定相关规则，要求对冲基金经理披露关于他们自己和所运营基金的信息。这将使SEC有权定期审计对冲基金的运营状况，并有可能避免这一行业的商业欺诈。证券监管机构目前虽然能够对对冲基金展开调查，但它们通常在收到对对冲基金行为不当的指控前不会采取任何行动。
与此同时，一些规模较小对冲基金目前在对其投资组合进行估价方面有很大的回旋余地，特别是在交易受到限制的按揭抵押证券等市场上。SEC提出定期审计的要求可能会给这些对冲基金造成更大压力，使它们在对自己的投资组合进行估价时不会信口开河。
纽约对冲基金Chilmark 21st Century Capital的总合伙人尼尔?魏斯曼(Neil Weisman)说，由于只进行年度审计，一些对冲基金就在其月度报告中对投资业绩夸大其词，SEC的新举措有可能改变这种局面。
据知情人士称，SEC的上述建议虽然尚非定论，还有可能作修改，但已得到了SEC主席威廉?唐纳森(William Donaldson)的支持。唐纳森过去就曾表示过，对冲基金业的规模是如此之大，SEC需要对该行业的运作予以更密切的观察。
其他的SEC官员也一直在呼吁加强监管，称这会有助于防止欺诈。他们举纽约司法部长斯皮策(Eliot Spitzer)对Canary Capital Partners LLC的欺诈指控为例，指出，如果SEC过去就对对冲基金实施监督，它应该早就发现了这些欺诈行为。
但SEC五位委员中的两位却对要求对冲基金在SEC登记的想法不表认同，这有可能妨碍唐纳森上述想法的实施。这两位委员是莎西亚?格罗斯曼(Cynthia Glassman)和保罗?阿特金斯(Paul Atkins)，他们已向其SEC的同僚表示，不能确信要求对冲基金在SEC登记的做法是一个正确步骤。虽然SEC在表决中只需简单多数就能批准这一规定，但唐纳森却喜欢达成共识，使重大决策获得全体一致的支持。
据知情人士称，上述两位SEC的委员担心，受理对冲基金经理的登记可能会分散SEC的资源，从而影响它的其他工作，如对共同基金的管理等。还有人担心，这种登记有可能被看作是SEC为对冲基金开了绿灯，从而促使一些投资者在未充分考虑投资风险的情况下就买进对冲基金。
与此同时，一些对冲基金业的业内人士则称，上述建议除了增加他们的书面工作外，对多数对冲基金不会产生多大影响。
多数对冲基金经理目前都未在SEC登记，不过一些对冲基金已在商品期货交易委员会(Commodity Futures Trading Commission)登记。
SEC的上述报告最早可能在下周一发表。彭博社(Bloomberg News)最先报导了报告的建议内容。这份报告预计将阐述对冲基金业的发展趋势，并举例说明这一行业内存在的欺诈和其他问题。这份报告预计还将探讨共同基金是否能使用一些对冲策略的问题。SEC的一位发言人拒绝对报告内容发表评论。
