The overall message from the Managed Funds Association (MFA) to its members at its February Network 2009 Conference in Key Biscayne, Fla. was “Get over it, it’s coming.” The “it” is regulation, and MFA is positioning itself to have a seat at the table or at least have its voice heard when new regulations come.
It is not the first time MFA has taken this approach. They accepted the Hedge Fund Registration Rule, approved in 2005 by the Securities and Exchange Commission (SEC), and sought to make it more palatable to the industry but one man, Phillip Goldstein, stood up to the SEC and got it reversed.
But this time is different, because Congress is holding the strings and they do have the authority to make law, something the SEC lacked and ultimately what caused that rule to be reversed in court.
“Lawmakers are going to be inclined to give regulators more authority,” said Roger Hollingsworth, executive vice president and managing director of government relations for MFA, at a panel on the impact of the Obama administration.
“Get over it, it’s coming,” repeated Darcy Bradbury, director of external affairs for the D.E. Shaw Group, adding that the question now is, “What can we do to inform the debate?”
MFA President and CEO Richard Baker said “America is mad,” and some people believe that the hedge fund industry contributed to the crisis. “Our role is to tell our story. We bring liquidity into distressed markets,” added Baker, who can now engage Congress more fully because he is no longer under any restrictions.
“I am available for duty,” Baker said, while cautioning, “Don’t assume there is going to be one bill and one vote. We are going to be engaged in a long trip together.”
CORRECTION
In the March Top Traders of 2008 feature, Roger Pegorsch’s CTA was misidentified. The name of the CTA is Commodity Futures Services. Futures regrets the error.
