Legislative Affairs

MFA is a recognized resource for information and insights about the alternative investment industry and has developed outstanding credibility as the voice of the hedge fund industry on a wide range of legislative issues over many years.

MFA is focused on providing information to Capitol Hill leaders to promote a deeper understanding of the alternative investment industry, and is engaged in consistent communication with Members of Congress and their staffs, particularly in advance of legislative or regulatory actions that might negatively impact business operations for MFA Members.

In order to deepen its policy engagement and broaden its representation of the industry, MFA pursues a wide range of initiatives including:

6.9.2010		MFA submitted a letter to the SEC in response to the rule proposals from the applicable self-regulatory organizations that would impose circuit breakers to halt trading in any individual security on the S&P 500® Index in the event that the price of such security moves ten percent or more from a sale in a preceding five-minute period.  In our letter, MFA supports the proposals and the imposition of the stock-by-stock circuit breakers as a measure that will help to prevent market disruptions and restore confidence in the markets.
5.13.2010		MFA today sent a letter to U.S. Senate offices regarding the Restoring American Financial Stability Act of 2010.  MFA supports many key objectives of the legislation including, promoting greater transparency in the financial system; creating a systemic risk supervisory regime to head off future financial crises before they arise; strengthening investor protections – including the mandatory registration of all investment advisers to private funds; and, enhancing the supervision and transparency of the over-the-counter (“OTC”) derivatives market.  While we support the provisions in S. 3217 that take a thoughtful approach to accomplishing these important and necessary policy goals the letter expresses our concern with certain measures found in various titles of the legislation, which we believe may be harmful to investors, U.S. financial and capital markets, and our broader economy.
5.7.2010		MFA submitted a letter to the SEC in response to its request for comments on its Equity Market Structure Concept Release.  As a result of market structure changes, many aspects of our equity markets—spreads, fees, execution speed, efficiency, and pricing transparency/reliability—have steadily and drastically improved over the last several years to the benefit of investors.  MFA also recognizes that the regulations and technological and market innovations, in reshaping the equity market structure, raise new regulatory concerns that the Commission should evaluate.   MFA supports the Commission’s efforts to review our rapidly developing market structure and to collect data to assist in its evaluation.
4.26.2010		MFA submitted comments to the CFTC in response to its request for comments on its proposed rule on Federal Speculative Position Limits for Referenced Energy Contracts and Associated Regulations.  MFA is concerned that the CFTC’s proposal will not reduce price volatility or prevent market manipulation, but rather, will hinder commercial risk management.  MFA is also concerned that the proposal will reduce liquidity in U.S. futures markets and reduce the competitiveness of U.S. markets.  MFA urges the Commission to consider the availability of alternative approaches, such as implementing aggregate position accountability levels, requiring more comprehensive reporting of positions by traders in all related trading venues, publishing more information about hedger and swap dealer positions in OTC and exchange markets, and using additional resources to expand its current monitoring and enforcement programs.
4.21.2010		MFA submitted a letter to the leadership of the Senate Committee on Agriculture, Forestry and Nutrition regarding the Wall Street Transparency and Accountability Act of 2010, which seeks to regulate the over-the-counter derivatives market. In the letter, MFA expressed its support of the objectives of the bill, but highlighted several key concerns, including:  (i) the definitions of “swap dealer” and “major swap participant” (“MSP”); (ii) the potential imposition of capital requirements on MSPs; (iii) the requirement that the recipient of any non-dealer swap margin payment be required to register as a futures commission merchant; and (iv) the authority of the SEC to establish position limits with respect to securities and security-based swaps.
4.7.2010		MFA today expressed its support for Treasury Secretary Geithner’s renewed call for the European Union to participate in globally coordinated financial regulatory reform in a way that resists protectionist-driven initiatives.  Read MFA’s full statement here.  Click here to read the full text of Secretary Geithner's letter.
3.29.2010		MFA submitted comments to the SEC in response to its request for comments on its proposed rule on Risk Management Controls for Brokers or Dealers with Market Access.  MFA supports the SEC’s proposal to require broker-dealers to apply appropriate and pragmatic market access risk management controls for both proprietary and customer order flow, but believes that a final rule should be constructed to permit some flexibility in the implementation of the controls.  We also believe it is appropriate for the SEC in an adopting release to reiterate the need for broker-dealers to maintain confidentiality safeguards to prevent the misuse of a customer’s order information.
3.23.2010		MFA today expressed its support for Senator Charles E. Schumer's (D-NY) letter to Treasury Secretary Geithner calling for globally coordinated financial regulatory reform in a way that resists protectionist-driven initiatives.  Read MFA’s full statement here.  Click here to read the full text of Senator Schumer's letter.
3.1.2010		MFA, several buy-side firms, the major swap dealers and other industry trade associations jointly submitted a letter to global regulators, setting out new commitments and targets across asset classes with respect to central clearing, transparency, standardization, operational efficiency and collateral management.  There were two central themes in the letter: (i) increased transparency by the creation and usage of trade repositories; and (ii) expanded usage of central clearing (including the identification of impediments of buy-side clearing and steps to eliminate those impediments).
2.12.2010		MFA submitted a letter to Treasury Deputy Secretary Neal Wolin, which set out several issues related to the treatment of OTC derivatives contracts in the context of bankruptcy and resolution authority. Specifically, the letter set out concerns regarding the segregation of collateral and portability of OTC contracts in the event that a clearing member of a central counterparty provider goes into bankruptcy. The letter summarized the analysis and proposed legislative amendments with respect to the U.S. central clearing proposals that are contained in a report prepared last year by Cleary Gottlieb Steen & Hamilton. The letter also set out differences in the treatment of derivatives contracts under the Bankruptcy Code and the Resolution Authority title passed by the House of Representatives, respectively.
2.4.2010		MFA submitted a letter to the Massachusetts Department of Revenue seeking assistance to clarify the Department’s audit guidelines for determining when investment management is a trade or business for the purposes of Massachusetts tax law. MFA sought this clarification because of the increased uncertainty among our Massachusetts members regarding the appropriate standards to use when determining whether their investment management activities are properly regarded as constituting a trade or business.
12.8.2009		MFA submitted a letter to the House Leadership, Ways and Means Committee Chairman Charlie Rangel (D-NY) and all Ways and Means Committee Members regarding the Tax Extenders Act of 2009 (H.R. 4213), which includes revenue offsets that would change the tax treatment of carried interest and provisions included in the “Foreign Account Tax Compliance Act of 2009” (H.R. 3933). In the letter, MFA cautioned that the tax extenders legislation could result in serious and negative consequences for U.S. capital markets, job growth and capital formation. In addition, the letter put forth MFA’s position with respect to the “Let Wall Street Pay for the Restoration of Main Street Act of 2009” (H.R. 4191), which would impose a transaction tax on all financial transactions. As stated in the letter, such a tax would significantly jeopardize our economy’s ability to recover.
12.1.2009		MFA submitted this letter on behalf of MFA members to House Financial Services Committee Chairman Barney Frank (D-MA) and all other Members of the Financial Services Committee. The letter 1) provides our views regarding the “Financial Stability Improvement Act of 2009”, the systemic risk and resolution authority legislation currently being considered by the Committee; 2) expresses our significant concern with the assessment mechanism being proposed to finance the new Systemic Resolution Fund; and 3) highlights our specific objection to the recent adoption of an amendment, offered by Representative Brad Sherman (D-CA), that would ‘carve-in’ hedge funds, making them subject to the assessment at an asset threshold lower than that which would apply to other financial institutions -- including those which may be systemically relevant.
11.9.2009		MFA submitted a letter to the Department of the Treasury regarding the Obama administration's legislative proposal titled the "Over-the-Counter Derivatives Markets Act of 2009" ("DMA"). A copy of the proposal can be found here. In our letter, MFA provided a number of comments, which we believe are consistent with the proposal's public policy goals and will further enhance the benefits of OTC derivatives regulation.
11.5.2009		MFA submitted a written statement in connection with the House Ways & Means Subcommittee on Select Revenue Measures’ hearing, "Foreign Bank Account Reporting and Tax Compliance" held on November 5, 2009. In the written statement, MFA expressed its strong support for the efforts in Congress and the Obama administration to provide regulators with the authority needed to detect and prevent tax evasion and non- compliance with U.S. tax laws by U.S. persons holding investment assets in offshore accounts, which includes the recently introduced "Foreign Account Tax Compliance Act of 2009" (H.R. 3933). MFA also recommended that Congress should further examine and amend certain measures in the legislative proposals in order to avoid unintended and detrimental consequences to U.S.-based hedge fund managers.
10.29.2009		MFA President and CEO, Richard H. Baker, testifies before the U.S. House of Representatives Committee on Financial Services hearing, “Systemic Regulation, Prudential Matters, Resolution Authority and Securitization.”Click here to read MFA’s testimony. Click here to read MFA's press release.
10.7.2009		MFA General Counsel, Stuart J. Kaswell, testifies before the U.S. House of Representatives Committee on Financial Services hearing entitled, “Reform of the Over-the-Counter Derivatives Market: Limiting Risk and Ensuring Fairness”. Click here to read the testimony. Click here to read MFA’s new release.
10.6.2009		MFA General Counsel, Stuart J. Kaswell, testifies before the U.S. House of Representatives Committee on Financial Services, at a hearing entitled, “Capital Markets Regulatory Reform: Strengthening Investor Protection, Enhancing Oversight of Private Pools of Capital, and Creating a National Insurance Office.” Click here to read the testimony. Click here to read MFA’s news release.
7.17.2009		MFA President and CEO, Richard H. Baker, testifies before the House Financial Services Committee hearing, ”Industry Perspectives on the Obama Administration’s Financial Regulatory Reform Proposals.“ Click here to read the testimony. Click here to read MFA’s news release.
7.15.2009		MFA member, Mr. Dinakar Singh, Founder and Chief Executive Officer, TPG-Axon Capital Management, LP, testifies before the Senate Banking Subcommittee on Securities, Insurance, and Investment hearing, ”Regulating Hedge Funds and Other Private Investment Pools.” Click here to read the testimony.
5.7.2009		MFA President and CEO, Richard H. Baker testifies at the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises hearing, “Perspectives on Hedge Fund Registration.” Click here to read MFA’s testimony.
3.26.2009		MFA President & CEO Richard H. Baker, testified this afternoon before the U.S. Senate Committee on Banking, Housing, and Urban Affairs hearing, “Enhancing Investor Protection and the Regulation of Securities Markets – Part II.” To read his testimony, please click here. Please click here to read the testimony of the other witnesses at the hearing.
3.5.2009		MFA President & CEO Richard H. Baker, testified this morning at 10 a.m. before the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises hearing, “Perspectives on Systemic Risk.” To read his testimony, please click here. To view the hearing, please click here.
2.4.2009		MFA’s Executive Vice President and General Counsel, Stuart J. Kaswell, testified before the U.S. House of Representatives Committee on Agriculture at its hearing on the “Derivatives Markets Transparency and Accountability Act of 2009”
11.24.2008		MFA welcomes the announcement of President-elect Obama’s economic team.
11.14.2008		MFA expressed its support for the announcement made today by the U.S. President’s Working Group on Financial Markets regarding measures intended to strengthen the oversight and infrastructure of the over-the-counter derivatives markets.
11.12.2008		MFA Senior Legal Counsel Benjamin Allensworth's testimony on behalf of MFA at the United States House of Representatives Committee on Financial Services’ Hearing on “Private Sector Cooperation with Mortgage Modifications – Ensuring that Investors, Servicers and Lenders Provide Real Help for Troubled Homeowners.”
10.10.2008		MFA filed an amicus brief with the United States Court of Appeals for the District of Columbia Circuit in connection with its review of an administrative complaint filed by the Federal Energy Regulatory Commission (FERC) against Amaranth Advisors, L.L.C. In the July 26, 2007 complaint, FERC alleges that Amaranth manipulated natural gas futures prices on three days by engaging in transactions involving natural gas futures traded on the New York Mercantile Exchange. The CFTC has also brought suit against Amaranth for attempted manipulation of natural gas futures traded on NYMEX on two of the three days. MFA’s amicus brief, filed jointly with FIA, CME Group and NFA in support of Amaranth and the CFTC, argues that the CFTC has exclusive jurisdiction under the Commodity Exchange Act to prosecute Amaranth for the alleged conduct. The brief expresses no view on whether FERC would have statutory jurisdiction to reach futures trading if it were not precluded by the CFTC’s exclusive jurisdiction.
10.7.2008		MFA with other associations sent a letter today to the FTC recommending amendments to its proposed rules prohibiting market manipulation of the wholesale petroleum industry. The letter, among other things, urges the FTC to recognize the CFTC’s exclusive jurisdiction over energy futures and options trading and adopt an appropriate safe harbor exemption in its rules.
10.3.2008		Richard H. Baker, MFA President and CEO, issued this statement applauding the House passage and President's signing of "Emergency Economic Stabilization Act."
10.2.2008		Richard H. Baker, president and CEO of Managed Funds Association, issued this statement regarding the Senate’s passage of the “Emergency Economic Stabilization Act.”
9.22.2008		MFA sent a letter to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA), on H.R. 6049, the Renewable Energy and Job Creation Act of 2008), which, among other things, repeals the tax deferral of offshore compensation arrangements to pay for clean energy tax credits and tax extenders on popular business deductions and credits. The current draft of the bill includes 10-year transitional relief for existing arrangements, but does not provide such relief for existing side pocket investments. MFA’s letter requests transitional relief for these investments, effectively making the bill prospective in nature.
9.18.2008		MFA today joined seven trade associations in sending a letter to U.S. House of Representatives Speaker Nancy Pelosi (D-CA) and Minority Leader John Boehner (R-OH), opposing provisions in H.R. 6604 that could impact U.S. financial markets at a time of stress in the world financial system.
9.11.2008		MFA said today that it shares the GAO’s goals of ensuring safety and soundness in the retirement funds of American workers. The GAO released a report yesterday, DEFINED BENEFIT PENSION PLANS, Guidance Needed to Better Inform Plans of the Challenges and Risks of Investing in Hedge Funds and Private Equity, in which it recommends that the Department of Labor provide guidance on investing in hedge funds and private equity funds that describes steps that pension plans should take to address the challenges and risk of these investments. Click here to read MFA’s press release. Click here to read the GAO report. Click here to read a summary of the GAO report.
9.9.2008		MFA submitted a comment letter to the Department of Labor's Erisa Advisory Council in advance of the Council’s September 11 meeting on Hard to Value Assets.
8.29.2008		MFA submitted a comment letter to the Department of the Treasury and Internal Revenue Service regarding Temporary Regulation TD 9407, which, among other things, changes the automatic extension filing deadline for partnership tax returns from October 15th to September 15th. In MFA’s letter, MFA requests that the deadline revert back to October 15th because the new deadline will make accurate reporting exceedingly difficult for alternative investment partnerships due to the shorten timeframe in which they have to complete their tax-reporting process.
8.20.2008		MFA sent a comment letter to the Financial Accounting Standards Board (FASB), requesting that FASB adopt a rule exempting hedge funds and certain other private investment funds from FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No.109 (FIN 48). Click here for a copy of MFA’s August 20, 2008 letter. The recent letter sent to FASB makes reference to an earlier MFA letter sent on January 12, 2007 to FASB, requesting the postponement of the effective date of FIN 48 because of significant uncertainty in the implementation of FIN 48 by private investment funds. Click here for a copy of MFA’s January 12, 2007 letter.