Hedge Funds to Enjoy Advantages Over Banks at Alternative Investments Conference

From: GoldenNetworking.net
Published: Tue May 18 2010

A recent journalistic note by Bloomberg BusinessWeek's Robert Schmidt explained that "the private investment pools have been largely silent during this year's legislative imbroglio, confident that the regulatory proposal that directly affects them—a requirement to register with the Securities & Exchange Commission—won't crimp their business; hedge funds have thus far dodged the Washington reform bullet." GoldenNetworking.net's upcoming High-Frequency Trading Leaders Forum 2010, "Innovating and Profiting from High-Frequency Trading in 2010 and Beyond" (http://www.HFTLeadersForum.com), May 27th, 2010, at New York City's Flatotel Hotel, will explain why, if hedge funds get light regulatory treatment from Congress, they will end up with a huge competitive advantage over commercial banks.

"The tightening of regulations on banks could usher in a new era of profitability for hedge funds, pushing money and trading talent their way. One example that is gaining attention: Senators are about to give final consideration to the so-called Volcker Rule, named after its proponent, former Federal Reserve Chairman Paul Volcker, that would bar commercial banks from so-called proprietary trading—that is, solely for their own accounts. If it passes—and a similar version is adopted by the House, which approved its financial overhaul legislation in December—star traders in search of better bonuses may flock to hedge funds. The Volcker Rule would also prohibit banks from owning hedge funds. The tougher leverage limits and capital requirements now envisioned for banks could make it harder for them to compete against hedge funds' higher returns. A third proposal, to separate derivatives trading from commercial banking, is opposed by the Treasury Dept. because it worries that more trading in the complex securities would gravitate to—you guessed it—hedge funds."

The note concludes: "The Obama Administration is comfortable with the current proposals for hedge funds. Requiring funds to register with the SEC will give regulators a window onto the funds' opaque operations, a big improvement over the status quo, the White House reasons. If a hedge fund grows too large, it would also face stepped-up oversight by the Federal Reserve under the proposed reform legislation."

High-Frequency Trading Leaders Forum 2010 is produced by Golden Networking (http://www.goldennetworking.net), the premier networking community for business executives, entrepreneurs, investors and diplomats, founded by former McKinsey consultant and Columbia Business School MBA Edgar Perez. Upcoming Leaders Forums and Business Networking receptions include:

High-Frequency Trading Happy Hour, (http://www.HFTHappyHour.com), June 8th, New York City
Real Estate Leaders Forum 2010, "Successfully Investing in Distressed Real Estate Assets" (http://www.RealEstateLeadersForum.com), June 17th, New York City
Panelists, speakers and sponsors are invited to contact Golden Networking by sending an email to info@goldennetworking.net. Golden Networking has been frequently featured in the press, including recent articles in The New York Times, "Golden Networking Helps Job Seekers Make Overseas Connections" (http://www.nytimes.com/2009/11/07/nyregion/07network.html) and Columbia Business School's Hermes Alumni Magazine, "10 Under 10" (http://www7.gsb.columbia.edu/alumni/news/ten-under-ten).

Edgar Perez
New York, NY
Company: GoldenNetworking.net
Contact Name: Edgar Perez
Contact Email: eperez@goldennetworking.net
Contact Phone: 516-761-4712

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