Atkins questions hedge fund plan

One of the five members of the Securities and Exchange Commission is skeptical about an agency proposal that would require individuals to have at least $2.5 million in investments, excluding the value of their primary residence, before putting money into hedge funds.

“I have not made up my mind, but commenters have raised serious issues for the commission to consider,” Paul Atkins, a Republican, told Reuters in an interview this week.

The chairman of the SEC, Christopher Cox, has said that the proposal is being reviewed, and that he expected the agency to soon finalize the rule.

The plan has enraged some investors. They deluged the SEC with letters this year contending that setting such a high bar would deprive them of investment opportunities in hedge funds, which are private investment pools that face little or no government regulation.

Currently, the SEC requires investors to have at least $1 million, including real estate, before investing in hedge funds, a level established in 1982.