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News December 6, 2004 Issue

CFTC Reacts to SEC Hedge Fund Rule

The Commodity Futures Trading Commission is "going to continue to push hard for relief for our registrants." So said CFTC acting chairman Sharon Brown-Hruska at last week’s SIA hedge funds conference. The CFTC, she promised, will continue to ask the SEC to provide an exemption for hedge fund managers that already are registered with the CFTC as CPOs or CTAs. Such an exemption, she said, could be complimented by formal information sharing between the SEC and the CFTC. Brown-Hruska had asked the SEC for such an exemption in an October 22 comment letter on the SEC’s hedge fund rulemaking.

Brown-Hruska also announced that CFTC will hold a hedge fund roundtable of its own in late February or March 2005, to look at the entire hedge fund/commodity pool operator industry. The roundtable, she said, will be "an important step" in working through the challenges that the hedge fund rule presents. Brown-Hruska noted that only three out of five SEC commissioners were in favor of hedge fund manager registration. She also expressed concerns about "regulatory creep" under the new regime.