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Only When the JOBS Act Is Finalized Will Hedge Funds Change

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Without clarity, most hedge fund managers will stay silent. Once the JOBS Act is settled, expect attention to turn to FATCA and Form PF.

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In the end, the association's efforts were not in vain.

"We were successful," said Ackles. "It was our first effort and they raised the AUM level to $150 million. That really taught us that speaking up for that group, our main constituency, was worthwhile."

That said, Dodd-Frank is not over. "They are only part-way through implementing it, so there are still concerns relating to Dodd-Frank here in the United States," said Ackles, adding that hedge fund managers should also keep an eye on FATCA, the Foreign Account Tax Compliance Act.

"FATCA is interesting because it is actually making governments share data about investors and where their money is, and it will have an impact on the investor side of the equation."

Beyond that, hedge fund managers need to pay attention to Form PF. "It's a 49-page, five-section document that hedge fund managers have to fill out," said Ackles. "It's got 79 expandable questions, and they have to submit it to the SEC and the CFTC using a specific protocol."

Election Effect

Ackles said that the Hedge Fund Association has the view that if President Obama is re-elected, "all of these things will continue to go as they are currently in place."

"Romney has indicated that he is going to look back at some of these things and potentially roll them back in congress," Ackles added. "The uncertainty on the regulatory front is also a challenge to not just the hedge funds but all of Wall Street."

Regardless, the Hedge Fund Association does not support a particular candidate. "The Hedge Fund Association is non-partisan," said Ackles. "What we are hoping for is smart, efficient regulation that's not overly burdensome."

Ackles said that by "overly burdensome," he means that the government cannot expect hedge funds to "spend all of their money on lawyers and compliance people."

"Contrary to what some mainstream media have said about hedge funds and private equity, they are job creators," said Ackles. "There is a benefit to hedge funds, and obviously there's a benefit to Wall Street. Main Street may not see it, and politicians may use it as a way to almost re-create class warfare. But capitalism is not a bad thing. It's what this country was based on."

Ackles said that the Hedge Fund Association supports regulation, as it is an important part of the industry. He also said that hedge funds need to realize that they must adhere to these regulations.

"We certainly want the bad apples to go away and face the music," Ackles continued. "But it is our view that it just needs to be done in a way in which it's not too complicated. Look at what I just told you about Form PF [and] Dodd-Frank -- there's hundreds of pages! To be able to interpret this, and then have the right guidance from your legal counsel as a hedge fund manager and you have to rely on that. You can't be the legal expert interpreting what's okay and what's not."

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