[Congressional Record Volume 152, Number 124 (Thursday, September 28, 2006)]
[Extensions of Remarks]
[Page E1891]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          HEDGE FUND STUDY ACT

                                 ______
                                 

                               speech of

                         HON. MICHAEL N. CASTLE

                              of delaware

                    in the house of representatives

                     Wednesday, September 27, 2006

  Mr. CASTLE. Madam Speaker, I rise today in support of my bill H.R. 
6079, the ``Hedge Fund Study Act.'' I want to thank both Chairman, 
Oxley, and Chairman Baker for the Financial Services Committee's 
support for this study and efforts to address the evolving hedge fund 
industry.


 =========================== NOTE =========================== 

  
  September 28, 2006--On Page E 1891 the following appeared: HEDGE 
FUND STUDY ACT HON. MICHAEL N. CASTLE OF DELAWARE IN THE HOUSE OF 
REPRESENTATIVES Wednesday, September 27, 2006 Mr. CASTLE. Madam 
Speaker, I rise today in support of my bill H.R. 6079, the ``Hedge 
Fund Study Act.''
  
  The online version should be corrected to read: HEDGE FUND STUDY 
ACT SPEECH OF HON. MICHAEL N. CASTLE OF DELAWARE IN THE HOUSE OF 
REPRESENTATIVES Wednesday, September 27, 2006 Mr. CASTLE. Madam 
Speaker, I rise today in support of my bill H.R. 6079, the ``Hedge 
Fund Study Act.''


 ========================= END NOTE ========================= 

  This legislation will require the President's Working Group on 
Financial Markets to study the growing marketplace and make 
recommendations regarding hedge fund disclosure. It is a good first 
step towards determining what type of disclosure hedge funds should 
provide to regulators and will establish some standards for increased 
transparency in our financial system that is important for market 
discipline and investor confidence.
  Hedge funds are now a $1.2 trillion industry and can be high-risk, 
high stake investments. While usually targeted to wealthy investors, 
hedge funds are seeing an increase in ties to pension plans and 
consequently, the financial earnings of millions of Americans. For that 
purpose, I think it is necessary that regulators explore hedge funds 
and the potential risks they pose to financial markets and investors.
  This study will come at a good time, as there is much recent 
discussion over the Securities and Exchange Commission's ruling that 
required hedge fund advisors to register with the SEC and undergo 
routine inspections. This ruling was rejected by the U.S. Circuit Court 
of Appeals for the District of Columbia and thrown out partly because 
the court called hedge funds notoriously difficult to define. A 
contemporary study of the hedge fund industry would allow legislators 
to better understand risks born by our economic structures. Moreover, 
it will allow legislators to best protect the American economy from any 
unnecessary financial risks.
  Although the President's Working Group was created originally to 
address issues related to the 1987 stock market crash, it now serves as 
a forum through which the participating agencies exchange information 
on and coordinate regulatory policy regarding U.S. financial markets 
more generally. The chairman of the Working Group is the Secretary of 
the Treasury, and the other members are the chairmen of the Board of 
Governors of the Federal Reserve System, the Securities and Exchange 
Commission, and the Commodity Futures Trading Commission.
  The United States is a global leader in the financial services 
industry. For this reason it is important for regulators to contemplate 
our strong international position during their consideration of hedge 
fund disclosure. I commend our committee for acknowledging this 
important issue and the Senate for their recent attention concerning 
hedge funds. It is essential we understand this rapidly evolving 
industry and the impact hedge funds have on our national securities 
markets.
  Madam Speaker, this legislation is a good bipartisan bill supported 
by other members of the Financial Services Committee including Chairman 
Leach, Chairman Frank and Representative Garrett. I am pleased today 
that we have brought this much needed bill to the floor. I urge my 
colleagues on both sides of the aisle to join me in supporting this 
important and very necessary legislation.

                          ____________________