Subject: File No. DF Title IV - Exemptions
From: law professor

November 3, 2010

I have carefully followed the Dodd-Frank Financial Reform Act and all of its history throughout the last several years. I would like to know how the SEC thinks that foreign private hedge funds with US investors (15 or more or $25 million from them) should be treated differently than managers to US funds. I have read all your materials on your 2004 rules for foreign funds, which was by your rulemaking and not statute and likely superceded by Dodd-Frank Financial Reform. Can't fund managers just set up an offshore vehicle and get around your rules with this regime? What I can't understand is how this is possibly consistent with the clear congressional intent in Dodd-Frank to require registration--not just registration minus the rules that go with it--when there are US investors. If you have US investors shouldn't the rules at least apply to those private funds with such investors. I would concede that the full regulatory regime would not make sense if there are no US investors in a particular hedge fund. It seems like there is a lot of lobbying by the financial industry (and closed door meeting with the SEC as indicated on the comment pages with cryptic references to items discussed) and their mouthpieces to get a favorable result. I am also following Europe and think that your counterparts over there have their eye on the ball and are going to regulate U.S. fund managers with European investors.