For the second time this week, an in-house opponent of the Securities and Exchange Commission's hedge fund registration rule has expressed displeasure with the measure. Obviously fed up with it, SEC Commissioner Paul Atkins, following the example of his compatriot Cynthia Glassman, took the podium in part to dish out a heaping helping of distaste for the rule. Speaking before the IA Compliance Best Practices Summit 2006, Atkins said the addition of hedge fund advisers to the registration rule "could greatly impair our ability to oversee other investment advisers, whose activities are much greater consequence to the investing public, based on sheer numbers alone." He noted that, while there may be hedge fund fraud, it will likely not be committed among those that register anyway, and besides, "we have broad authority already under the securities laws" to go after those offenders.

Atkins said some advisers might view the registration of HF advisors as "a good thing" – but only because they would wrongfully think there is "safety in numbers" and that the more firms the SEC has to keep an eye on, the less of chance of becoming the focus of the agency's attention. He assured the audience that while hedge funds are viewed as "flavor of the day," the SEC will not neglect the more troublesome entities under its watch.

Atkins addressed the problem of registration Form ADV not providing the necessary information for its "risk-based examination model," and noted that some have suggested the SEC could obtain more information from advisers by requiring, gulp, quarterly SEC filings.

Before leaving the topic of hedge funds, Atkins said, "Would it not be ironic if the hedge fund rule increased the regulatory burden on non-hedge fund advisors, as well?"