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March 09, 2012 at 10:12 AM
SEC Commissioner Daniel Gallagher told chief compliance officers on Thursday that he sees cases where the securities regulator can grant exemptive relief for private fund advisors that must register with the agency as mandated by Dodd-Frank.
“I believe that there will be cases, moving forward, when an individual advisor or a particular class of advisors ought to be granted some measure of relief from the full panoply or requirements that come with registration under the Advisers Act,” Gallagher told attendees during the Investment Adviser Association’s annual compliance conference in Arlington, Va., just outside Washington.
Gallagher said that he’s “alarmed at the looming costs of registration” for private fund advisors, which must register with the commission by March 30. “The rationale of having them register is questionable,” he said, and expansion of registration for private fund advisors “will not protect investors.”
The SEC promulgated the rule requiring private fund advisors to register with the commission last June.
Gallagher went on to say that “As both Congress and the Supreme Court have recognized, not all investors need the fullest protections of the securities laws. Indeed, in many instances, investors with a significant degree of sophistication would prefer to trade away some of the requirements of the securities laws in exchange for greater freedom in investment selection.”
To regulate as if all investors are alike, Gallagher said, “may lead the Commission to impose massive costs on the system without a purpose that is consistent with the Commission’s mission and its decades of experience.”
