Speaking in Boston at the Managed Funds Association Seminar on Sound Practices for Hedge Fund Managers, Acting Undersecretary for Domestic Finance Anthony Ryan said on Monday he expects GSE legislation to be passed soon by Congress.

"We have been working closely with Congress and expect this legislation to be completed soon," Ryan said.

Ryan also noted that Fannie Mae and Freddie Mac require better oversight. "During the last several weeks, we unfortunately have seen the consequences of having large, innovative financial institutions without appropriate oversight," he said.

By Steve Stecyk and edited by Cristina Markham