# kaal:claim:2714974-036

**Claim.** The combined restrictions on registered investment company short selling, leverage, and organizational structure create a substantial disincentive for such companies to pursue absolute return strategies that are independent of the aggregate value of the market.

**Type.** mechanism  **Support.** argued

**Holds when.**

- applies to registered investment companies under the Investment Company Act

**Source quote.**

> The restrictions on investment company short selling, leverage, and organizational structure create a substantial disincentive for such companies to engage in so-called absolute return investment strategies, which are strategies that are independent of the aggregate value of the market.

**From.** Kaal and Oesterle, *The History of Hedge Fund Regulation in the United States* (2016), Relaxing the Regulation of Mutual Funds, page 28

**Cite as.** Kaal and Oesterle, The History of Hedge Fund Regulation in the United States (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2714974

**Verify.** sha256 of source PDF `7764601d3ed5bb056b58949e8411eff9dfb9855f143719062030c980c5fa801b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Oesterle%20-%202016%20-%20The%20History%20of%20Hedge%20Fund%20Regulation%20in%20the%20United%20States.pdf

**Topics.** private-funds

**Keywords.** mutual-funds, absolute-return, short-selling, leverage, investment-company-act

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