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From Kirsten Bischoff, Opalesque New York:

The hedge fund industry, mainly through its associations and representative groups has by and large supported the need for increased regulation. However, one aspect of the proposed hedge fund registration that has met with objection is the requirement that managers submit detailed reporting on positions and leverage. The managers' concern here focuses on what they determine is confidential information that, if made available in a public forum would reveal their "secret sauce" and take away the edge that their investors pay for.

As the industry grapples with finding a balance between necessary secrecy and forced transparency the worries over the protection of trade secrets are legitimate, but perhaps misplaced. If this financial crisis has highlighted anything - it is that regulatory and legal protections have not kept up with the leaps in cutting edge technology.

For hedge fund firms with trade secrets such as algorithms the immediate focus should be on the operational protection of these formulas - as leaks and thefts are a much more immediate threat through the hiring and firing of employees, contractors, and subcontractors, than they are through delayed position reporting to regulatory agencies.

"The problem we are facing as a society is that we are transitioning from an industrial society that was dominated by commerce and primarily the sale of goods, to a......................

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