Congress must go beyond requiring hedge funds or their sponsors to register and give the SEC additional authority and resources to police the industry, said SEC Chairman Mary Schapiro on April 27. Speaking at a summit on global financial regulatory reform hosted by Reuters, Schapiro stated that Congress should give the agency the authority to inspect and examine hedge funds, require the maintenance of books and records, and impose further restrictions when crises emerge.
In an interview on Bloomberg Television's "Political Capital with Al Hunt" that aired on May 4, Schapiro said it was "certainly possible" that the SEC would consider forcing hedge funds to publicly disclose short sale positions, imposing restrictions on leverage and restricting the types of investments hedge funds can make. Still, "[w]e're not at the point where we've made decisions about those things," she added.
The SEC would also need additional resources to "get the job done," said Schapiro. The Obama administration's proposed budget for 2010 would boost the SEC's budget considerably, with its enforcement division and its office of inspections and examinations each getting a budget increase of 6.6 percent.
Story: Schapiro Seeks Authority to Subject Hedge Funds to More Than Registration, 41 Sec. Reg. L. Rep. 806 (May 4, 2009)
Story: SEC's Schapiro Wants Power to Make Hedge-Fund Rules, Bloomberg (May 2, 2009)
Story: SEC Budget up Nearly 7% Under Obama Plan, Reuters (May 8, 2009)