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Managed Funds Association Pledges Leadership Role as SEC Proceeds toward Implementation of New Regulatory Regime; Reiterates Concerns Regarding Ramifications of Proposed Rules.

WASHINGTON -- In response to the adoption of a controversial new regulatory regime for hedge fund managers by the Securities and Exchange Commission (SEC), Managed Funds Association (MFA), the global voice for the hedge fund industry, announced that the Association is dedicated to working with the SEC to ensure that this new regime does not unduly hinder or impede the hedge fund industry's development and stressed its commitment to leading its membership in preparing for compliance with the new registration, infrastructure and related requirements (scheduled to take effect in February 2006).

MFA Chairman Adam C. Cooper said, "MFA has been and will continue to be the premier provider of education for our members and will assume a leadership role in providing guidance about these new regulatory obligations, as well as continuing to develop and promote industry sound practices."

MFA expressed disappointment in the SEC's decision to approve the proposed regulatory regime on an expedited basis, especially in light of the number of concerns raised during the brief comment period. "MFA extends its gratitude to Chairman Greenspan, other members of the President's Working Group, SEC Commissioners Atkins and Glassman, a number of Members of Congress, and our many colleagues who, like MFA, have opposed the imposition of this regulatory regime. Three out of every four commenters who took a position on this rule opposed it. It remains our opinion, and one that is obviously widely held, that the case for the SEC's proposal was not made," said MFA President John G. Gaine.

"Nonetheless, now that the SEC has demonstrated its intention to move forward with the implementation of this regime, MFA is prepared to work closely with and act as a resource to the SEC as it finalizes its rules for hedge fund managers. MFA is committed to providing the guidance necessary to allow this growing industry to continue to thrive while protecting the interests and goals of its investors," said Mr. Gaine.

MFA will carefully monitor developments at the SEC related to the implementation of this new regulatory regime. The Association has cautioned against the imposition of unnecessary and burdensome costs on an industry that is already regulated in a variety of ways and caters to an institutional marketplace. Mr. Gaine said MFA remains deeply concerned that the new regime may entail burdens that have the potential of damaging the innovation and entrepreneurial efforts that are the hallmark of the alternative investment industry and its ability to provide uncorrelated, risk-adjusted returns to diversified investment portfolios.

MFA, headquartered in Washington, DC, is the primary trade association representing professionals who specialize in alternative investment strategies including hedge funds, funds of funds and managed futures funds through effective advocacy and education. MFA's approximately 800 members manage a significant portion of the estimated $800 billion invested in these strategies.

Since its inception in 1991, MFA has provided industry leadership in government relations, communications, media relations, and education to MFA members and investors. MFA's 2003 Sound Practices for Hedge Fund Managers contains recommendations that are intended to promote sound business practices in the hedge fund industry and, in doing so, enhance investor protection while contributing to market soundness.
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Publication:Business Wire
Date:Oct 26, 2004
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