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News October 4, 2004 Issue

Senator Shelby to SEC: Act Carefully on Hedge Funds

In a September 28 speech, Senate Banking Committee chairman Richard Shelby (R-AL) urged the SEC to be careful when it comes to regulating hedge fund managers.

"Although I do not care to see ordinary investors directly investing in unregulated investment pools," he said, "I also believe that hedge funds play an important and beneficial role in our capital markets by promoting market efficiencies and enhancing liquidity. While I admire and support [SEC] Chairman [William] Donaldson as he leads the SEC in this area, I hope that the SEC acts carefully. A number of leading experts in capital market operations, including [Federal Reserve] Chairman [Alan] Greenspan, have urged caution as the SEC proceeds in creating a new regulatory scheme for hedge funds. I share this cautionary approach for such an important liquidity provider in our capital markets."

Shelby was speaking at the Laffer Conference, an annual event at which CEOs and other business types travel to Washington, D.C. to hear from various Congressmen.