Hedge Funds: Get Set to Register by Paula Schaap ,Senior Reporter , June 15, 2009 When President Barack Obama unveils his proposal for the overhaul of the financial sectorâs regulatory system, one thing is almost certain. Hedge fund firms will be required to register with the Securities and Exchange Commission. The asset class has protested that it was highly-regulated entities, like banks and insurance companies, which were behind the over-securitization of asset-backed debt and the subsequent economic crash. But government officials are still wary of what are viewed as unregulated large sums of money moving through financial systems. Bills to require hedge fund registration are now before both houses of the U.S. legislature. The SEC had tried to pass regulations several years ago that would require hedge funds to register. But hedge fund manager Phil Goldstein took the agency to court and the regulation was overturned. The new Obama plan is also expected to increase the oversight powers of the U.S. Federal Reserve and to create a system that will manage the collapse of huge financial institutions, those that have been deemed âtoo big to fail.â It is also likely to create a new agency that will oversee retail investment products, while doing away with the Office of Thrift Supervision, one of a number of agencies that supervise banks.
The US continues with its foolish ways of the last 20 years. Nothing has changed. Case in point: Allowing Black Rock to buy BGI. It means, again, MORE concentration of assets. More risk. I thought the idea lately was to NOT pile up assets into giant entities that are hard to understand/control? Didn't the top bank regulator recently say it was a mistake to allow top banks to grow so big? Less risky with smaller financial institutions? 'Seems after a 3 month rally people go back to their stupid greedy ways. What does 'regulation' do anyway? Another group of expensive paper pushers in some DC office reading bs reports written by HF's convincing them all is OK. If things are not OK, then you go overseas.
I think the US government has already been able to track US citizen banks accounts in Switzerland. I remember during the previous summer the IRS gained access of American citizens bank account numbers in the Cayman Islands and throughout the Caribbean.
when it comes to business or securities law, the ruling party or gov't can do whatever it pleases. democrats rule senate and congress now. the gov't can ban hedge funds. and use the the rackettering laws on hedge funds are crime racket. hedge funds are illegal crime activity. all the hedge/mutual industry bow down to Obama administration if you want to be in business. Never mess or piss off the gov't or the penalty is death. The ruling party of powers will always have it their way. Fighting the will of the ruling gov't always lose. Register and bow down to the gov't regulators or DIE!
"But government officials are still wary of what are viewed as unregulated large sums of money moving through financial systems." Exactly. Government officials are always wary of anything out of their reach to screw up. Because, you know, how are you going to figure out how to care for your money without the help of a government employee? Preposterous. Government workers are far better at everything. Why, just look at how profitable Amtrak and the Post Office are!
Barclays had to sell Barclays Global Investors because they needed to raise funds. BlackRock was the healthiest company on the block to acquire them.
Hedge funds as entities can still move to foreign jurisdictions (with or without tax treaties) and not be obligated to register. As for US Citizens and offshore accounts in their names, anywhere in the British Commonwealth, any NATO ally, and now Switzerland at the least if there is outright tax fraud or conclusive tax evasion they will be caught. There are still a good number of Asian countries that however that may only "formally" comply, but not necessarily. Even if a US citizen renounces citizenship they still must pay taxes for an additional ten years, it actually throws them into the spotlight makes them more suspicious. There are different procedures ranging from basic shell corporations to "citizenship by investment" programs in Latin American countries to laundering money through a series of investments, bank accounts, various assets (real, commodities such as gold or otherwise) and offshore businesses that can be created. Think about this, the Cayman Islands is the fifth largest financial center in the world. The smaller offshore commonwealth banks are mostly subsidiaries or at least affiliated with larger commonwealth banks (mainly from the UK) and US banks. When people move their money out of the swiss franc and into primarily dollars in the commonwealth who does it benefit?