About a month ago, I wrote about a nonsense statement that Senator Reed made about making it a requirement that all funds, including Venture and Private Equity, with >$30M under management, should have to register and report to the SEC. His rationale was that these funds can have an adverse effect on the global financial markets. I realize that using “rationale” was probably improper; I should have used irrational instead.
Well it seems that Senator Reed has been convinced to modify his position and has changed it to funds > $100M (See article in the WSJ). Now some people might think that Senator Reed has come a long way. After all, his raised his view by greater than 3X. The problem is that his belief that venture funds, of any size, have the ability to negatively affect the global economy. I would love to hear an explanation of how this would work.
He is also working hard to have this as part of the Financial Reform Bill that Senator Dodd is working on. So he couldn’t get enough support to have this passed as a separate bill. So he tries an end run to incorporate it in a massive piece of legislation.
The real question is exactly who does Senator Reed’s legislation benefit? For the life of me, I just can’t figure it out. Maybe someone else can shed some light on it and help me understand.