SEC Chair White Delivers Speech on Hedge Fund Transparency

SEC Chair Mary Jo White spoke at the Managed Funds Association Outlook 2013 Conference, focusing on the importance of transparency in the hedge fund industry. According to Chair White, managed funds, including hedge funds, have a duty to be more transparent now that JOBS Act, which lifted the general ban on public solicitation, has come into effect. As a result, she said that hedge fund managers must now speak openly and frankly with investors, as well as share more information with the regulators. In the latter regard, she said that the SEC was seeking more information about the hedge fund industry, and she particularly noted that the SEC had proposed various additional amendments to its rules relating to private placements that would allow the SEC to acquire more information. (See SEC's proposed amendments to Reg D, Form D and Rule 156.)

Chairman White said that the SEC would be conducting "presence exams" at newly-registered investment advisers, which were intended to be reasonably light tough exams to "assist" advisers in working to obtain their compliance objectives.

Finally, Chairman White noted that there was some need for the SEC to review its rules to assure that they worked as applied to advisers to private funds, and in this regard she particularly raised the question of whether the custody rule was well-tailored to private equity funds.

See: Chair White's Speech.