Once a hedge fund adviser is already required to register with the SEC, the marginal regulatory burden of also running a mutual fund or retail alternative fund is small, which gives registered advisers an incentive to enter the registered fund space.
Source quote, verbatim
Hedge fund advisers who are required to register with the SEC have incentives to also manage mutual funds or set up retail alternative funds because the regulatory burden is minimally higher in comparison with preregistration legal requirements.
Kaal, Confluence of Mutual and Private Funds (2016). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2715083
Holds when
hedge fund advisers already subject to mandatory SEC registration
Classification
mechanismsupport: arguedsecurities-lawcompliance
Related claims
restated_bykaal:claim:2998097-036 Hedge fund advisers already required to register with the SEC have an incentive to also manage mutual funds or...
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