The second incoming influential congressional committee chairman has made it perfectly clear that new hedge fund legislation is not on his horizon. Sen. Christopher Dodd (D-Conn.), tapped to head the Senate Banking Committee, told reporters that while he has concerns about “who’s involved in some of these hedge funds,” he won’t be spearheading a campaign to register them. “I’m not envisioning, legislatively, rushing back into that again,” Dodd said at a press conference. “Again, I’d rather listen to people who are out there talking about what needs to be done,” as he expressed concern for less sophisticated investors, such as members of pension plans, who may invest in hedge funds. Dodd’s comments come a day after Rep. Barney Frank (D-Mass.), set to become chairman of the House Financial Services Committee, also nixed a push for legislation, something he had done earlier this year, though unsuccessfully, when he introduced a bill that would give the Securities and Exchange Commission “the clear authority to require registration and monitoring.” Frank has reiterated his opposition to tighter regulation for hedge funds, but may hold hearings with no “predisposition to regulation one way or another” just to learn more about the industry. He has given no specific reason for his change of heart, other than statements he made setting forth greater priorities, while Dodd had praised for the industry: “Hedge funds have been a tremendous wealth-creation vehicle in our capital markets.” Meanwhile, the SEC is set to vote this week on new hedge fund proposals, including one that will increase the limit of potential HF investor’s minimum net worth before being allowed to invest.
