kaal:claim:1428387-036

A retail investor asset threshold would be gamed: managers would be incentivized to keep retail assets under the applicable threshold, thereby keeping the fund in the existing regulatory scheme without implementing additional retail investor protection.

Source quote, verbatim

Managers would be incentivized to keep the assets from retail investors under the applicable retail investor asset threshold. Therefore, they would keep the fund in the current regulatory scheme without implementing additional protection for retail investors. Arguably, this would at least make

From

Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009), VI.E Level of Retail Investors Triggering Asset Allocation, p. 51
https://ssrn.com/abstract=1428387 · source PDF

Cite as

Kaal, Hedge Fund Valuation Retailization, Regulation, and Investor Suitability (2009). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428387

Holds when

where regulation is triggered by a retail asset threshold

Classification

failuresupport: arguedfailure: threshold-gamingfamily: regulatory-arbitrageregulatory-failurerisk-and-incentives

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