Managed Funds Association
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Regulatory Agencies

Many regulatory agencies have jurisdiction over the alternative investment industry, including hedge funds, either directly or indirectly. These entities include the U.S. Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Federal Reserve, Office of the Comptroller of the Currency (OCC), Department of Treasury, Department of Labor, Financial Industry Regulatory Authority (FINFA) and National Futures Association (NFA). The Secretary of the Treasury, the Chairman of the SEC, together with the Chairman of the Federal Reserve and the Chairman of the Commodities Futures Trading Commission serve as members of the President's Working Group on Financial Markets (PWG).

To help shape agency policies, rules and proceedings, MFA cultivates relationships and regularly engages in active dialogue with regulators, including commenting on proposed rulemakings. Initiatives with regulatory agencies MFA undertakes or has undertaken include the following:

  • MFA supports the PWG Agreement that set forth a common set of principles and guidelines for oversight of private pools of capital and continuously offers its resources to each of the Members of the PWG.
  • MFA educates regulatory agency staff members at all levels about the alternative investment industry and industry best practices.
  • MFA works closely with SEC compliance staff and assists in providing targeted training for examiners.
  • MFA provided comments in opposition to a proposal by the U.S. federal banking agencies that would implement the Basel II International Capital Accords, which require a 100 percent capital charge for equity investments in hedge funds by U.S.-based banks.
  • MFA ensured that the SEC immediately provided guidance and no-action relief to the hedge fund industry on interpretive issues left open by the Goldstein decision.
  • MFA created a Market Regulation Subcommittee to foster a regular dialogue between the SEC Division of Market Regulation and hedge fund mangers.
  • MFA hosted an SEC Commissioner and SEC staff visit to hedge funds as part of its educational program.
  • MFA provided the SEC Division of Market Regulation with its concerns on proposed amendments to Regulation SHO.

In addition, MFA has addressed the following issues, among others, in pursuing its agenda with the various regulators:

  • Proposed hedge fund antifraud and accredited investor rules
  • Proposed amendments to short selling in connection with a public offering
  • Proposed rules under SOX 404
  • Amendments to the uptick rule
  • Increased CFTC funding
  • Exemptive relief for commodity pools under CFTC Rule 4.26(a)(2)
  • Nonqualified deferred compensation rules
  • Reports of foreign bank accounts
  • Rules under the Plan Asset Provision of the Pension Protection Act of 2006