From the sound of things at the Senate Banking Committee hearing on hedge funds, it appears there are no new regulations in the offing. “At this point, I wouldn’t see evidence that would suggest that there should be greater regulation of hedge funds,” Treasury Undersecretary Randall Quarles told the committee. That could change, of course, as the government becomes better informed about hedge funds, he suggested. He said his department will continue to study the industry for signs that the growth of hedge funds can potentially “change the nature of risk in our markets and financial institutions.” Earlier in the hearing, hedgies found a friend in Sen. John Sununu (R-N.H.), who questioned whether, at this point, the Securities and Exchange Commission should even continue its HF registration requirement since it could have “unintended consequences” (such as hedge funds moving abroad, as market observers have remarked at other times). While Sen. Jim Bunning (R-Ky.) backed a cautious approach to HF rules, the Baseball Hall of Fame pitcher did throw one curve: that it was “wrong” to have one set of regulations for unsophisticated investors, and another for sophisticated ones, such as those who put their money in hedge funds.
