The Managed Funds Association (MFA) reaffirmed its support for proposals to enhance the transparency and regulatory oversight over private pools of capital, including hedge funds and managed futures funds.

The organisation's views were given in a written testimony submitted to the House Financial Services Committee which is considering comprehensive reforms to the US financial regulatory system.

MFA outlined its positions on key issues impacting the alternative investment industry, including mandatory registration of unregistered investment advisers with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), the importance of enhanced investor and asset protection and the need for international coordination.

"The alternative investment industry has aligned interests with other market participants, including retail investors and policy makers, in re-establishing a sound financial system," Stuart Kaswell, MFA general counsel told Congress. "We share their commitment towards the restoration of credit, capital and investor confidence in global markets that can, in part, be accomplished through the construction of a smarter framework for financial regulation."

He said MFA and its members "support mandatory registration for investment advisers to all private pools of capital" with an exemption for managers with assets under management that were under a certain threshold but would be subject to state regulation. The organisation also said it supported a similar mandatory registration framework under the Commodity Exchange Act for all Commodity Trading Advisors (CTAs).

"MFA supports other smart regulatory reform measures, including enhanced transparency and disclosure among counterparties," he said, adding the organisation was "concerned" about initiatives that require fund managers to disclose proprietary information to their counterparties. Kaswell said that kind of information would "more appropriately be disclosed to a systemic risk regulator".

MFA also said it supported governance enhancements through the Advisers Act framework "including increasing the qualified client standard, requiring disclosure of key service providers to investors and requiring an annual audit of private funds by a public company accounting oversight board registered firm."