In Controversial Self-Regulatory Organization Proposed Bill, Hedge Funds Are to be Exempt

Congressional Bill HR4624, the “Investment Adviser Oversight Act of 2012” has been introduced into Congress, with a hearing scheduled to be held tomorrow, June 6, 2012. The co-sponsors of the Bill are Finance Committee Chairman Spencer Bachus (R-AL) and Carolyn McCarthy (D-NY). The idea behind the Bill is that the SEC is spread too thin in terms of staffing and funding resources and so it can not effectively supervise its registered investment advisers. The Dodd-Frank law in fact mandated a study to review and analyze the need for the SEC to have enhanced examination and enforcement resources for investment advisers. This study was completed in January 2011, and indicated, not surprisingly, that resources to meet the pending demand caused by the registration requirement of Dodd-Frank were indeed scarce. More in Forbes here.