New Fund Regulations in Connecticut
Half a dozen professionals today sent me the news stories on the new hedge fund regulations being put into place in Connecticut. The good news - they don't appear to be extreme and they won't affect many managers who are already registered with the SEC. While many managers don't want to increase costs of compliance I think almost every manager would like to see tools put into place to raise investor confidence in the industry.
Here are some article excerpts discussing these new regulations:
Prompted by the Bernard Madoff investment scandal and other financial failures, Democratic senators called Tuesday for Connecticut to become the first state in the nation to require more disclosure and transparency for hedge funds, private-equity firms, and venture capitalists.
Led by Senator Bob Duff of Norwalk, senators said the move was necessary in order to protect consumers and investors. The bill, which is supported by the Managed Fund Association, states that any firm that is not registered with the Securities and Exchange Commission must still abide by the SEC rules that state that material conflicts of interest must be disclosed to the investors.
"We're not changing the rules. These are the rules the SEC has,'' said Duff, who has been pushing for legislation for three years.
Hedge funds are sparsely regulated pools of money that belong to highly wealth individuals, who generally must put a minimum of $1 million into the fund. Many hedge funds are involved in risky investments and many have closed or are closing because of the collapse on Wall Street that started last September with the implosion of Lehman Brothers. source
We are looking forward to seeing all the hedge funds move to Nevada. Actually, when you think about it, the convenience factor alone is reason enough to make the move. A lack of proximity to Washington is also a major point for the trip West. source
For more information on hedge fund regulations and compliance please see our Hedge Fund Regulation Corner.