The Alternative Investment Management Association (AIMA) has expressed concern about the issue of dual registration for non-US investment advisers in legislation currently being debated on Capitol Hill.
“We fully support the financial stability goals of the Restoring American Financial Stability Act”, says Todd Groome (pictured), Chiarman of AIMA. “Our concerns relate to the potential duplicative registration of non-US hedge fund managers in the US where those managers are already registered and regulated by a non-US supervisor.
“If non-US hedge fund managers are subject to supervisory standards outlined by the G20 and the US, including similar reporting requirements and agreed information-sharing arrangements, then there should be an exemption from additional US registration for non-US hedge fund managers.
“Multiple registration, where a manager would have to report to two or more supervisors, is not only duplicative but also creates unnecessary administrative costs. Such duplicative costs and burdens will act as barriers to entry, especially for smaller managers, and ultimately limit investor choice.
“We are also concerned that US hedge fund managers may in turn face reciprocal duplicative registration requirements when offering investment advisory services outside the US. Again, this would act to limit investor choice and market access.
“Finally, if the SEC were to be given the task of registering and supervising all non-US investment advisers globally who have either 15 or more US investors or USD25 million of assets under management from US investors, this would place a massive burden on the SEC’s workload, certainly challenge their existing supervisory capacity, and thus would not be supportive of the broader financial stability objectives.”
AIMA has written to key US policymakers on the issue. The proposed legislation is currently being considered by the Senate.
