A top Fidelity Investments executive said Thursday that regulators' current interest in mutual fund directors would be better directed toward hedge funds.

Robert C. Pozen, the president of Fidelity Management and Research Co., said efforts by the Securities and Exchange Commission to make independent directors of mutual funds more effective shareholder advocates are largely unnecessary.

"Independent directors of most complexes do an excellent job," he said before addressing a luncheon held by the New York Financial Writers' Association.

Hedge funds, on the other hand, have an unfair competitive advantage because they are free of the regulatory constraints on the mutual fund industry, he said.

To remedy the imbalance, Mr. Pozen said, hedge funds - private investment pools that often use borrowed money to soup up their bets - should be required to disclose their holdings and leverage levels in detail twice a year. They should have rules limiting their managers' profits when the funds lose money, he said, and should have personal ethics rules.

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