SEC Commissioner Bags On HF Rule -- Again

Long outspoken against the Securities and Exchange Commission's new hedge fund registration rule, SEC Commissioner Cynthia Glassman once again has taken a jab at the measure, this time hyping the negative impact on investors. Speaking to the recent conference on SEC regulation outside the U.S., Glassman repeated her oft-stated complaint that the rules was "not well thought out," noting that the rule "not surprisingly...had unintended but totally predictable consequences." She pointed to the fact there "there is no clear definition of what a hedge fund is. So there is no simple way to check a box on registration Form ADV." Glassman said it requires the answers to several questions to make that determination. Worse than all that, she said, is that "global funds are excluding U.S. investors," which thus "inhibits" them from participating in a global capital market. What's more, she noted, the imposition of longer lock-ups – an option firms use to avoid registration -- reduces liquidity. "Overall, I was never quite clear as to what the real objectives of this rule were, so it's very hard to tell whether or not we are accomplishing them," Glassman admitted.