September 15, 2004
I am writing to express my opposition to the proposed rule requiring certain hedge fund managers to register under the Investment Advisers Act. I do not believe that the posited benefits of mandatory registration justify the costs the rule would impose on hedge fund investors, financial markets in general or to taxpayers. I share Federal Reserve Chairman Alan Greenspans view that the current system of voluntary registration is appropriate and that the SECs scarce resources may be used more productively in other areas. I believe that it would be more productive for the SEC to focus its efforts on the oversight of mutual funds, which affect the savings of a much broader segment of our society than the privileged few who are wealthy enough to invest with hedge funds. I oppose the proposed expansion of the SECs jurisdiction to include direct oversight of hedge fund managers. I believe that the large institutional investors and wealthy individuals who qualify to invest in hedge funds are capable of evaluating the merits of investing with registered and unregistered advisers, just as they may choose to invest in registered or unregistered securities and registered or unregistered funds. The SEC should not substitute its own views about the benefits of regulation for the judgments of highly sophisticated investors who can fend for themselves.