Jim Chanos launched a hedge fund web site in what seems to be a lobbying effort for the industry, which could soon see increased regulation.
The famed hedge funder agrees with increased financial regulation but says on the site, hedgefundfacts.org, that it has to be done in a “smart” way.
“Simply imposing new regulation, though, without properly tailoring it to address the relevant risks would add to the burdens of hard-working, but already overstretched government regulators. Investors could be lulled into the false belief that a problem has been resolved,” he writes.
The site offers a tutorial on hedge funds, stats, regulatory news…and goes into detail on how regulations should really be done.
Chanos says he is a “strong supporter of the SEC,” but questions burdening the hedge fund industry with additional rules, when “the greatest harm to investors and the global economy actually came from comprehensively regulated institutions like banks, insurance companies, broker-dealers, and government-sponsored enterprises?”
Some of his proposals include requiring money managers to keep client assets at a qualified custodian, and by requiring investment funds to be audited by independent public accounting firms, in an effort to reduce the risks of Ponzi schemes, and increased disclosure for larger funds.
Update: Chanos tells us “The new website is another tool for CPIC to communicate with policymakers and the media about the appropriate balance of oversight for hedge funds and other private pools of capital.”