The rather esoteric world of compliance has been quietly
pushed to the top of the agenda by the Securities and Exchange
Commission chairman, William Donaldson, and it has many funds
squealing with good reason. The proposed rule will have big
consequences for all funds....particularly the smaller ones
that will find themsleves footing a pretty hefty bill for their
compliance procedures. And, if the SEC has its way, no one will
escape the extra red tape because the proposal has become
inextricably linked to the SEC's much bigger plan for mandatory
registration of hedge funds.
This little noticed compliance rule, which was originally
proposed in February, requires that all registered investment
advisors have compliance procedures in writing and a chief
compliance officer. What has surprised people is that Donaldson
seems to want to fast-track the plan. In...