SEC Hedge Fund Registration | A New Proposal

SEC Registration

SEC Hedge Fund Registration Proposal

( Senator Charles Grassley (shown left) will soon be introducing a bill which will again attempt to force hedge fund managers to register with the SEC. Below is a short article excerpt on this:

Sen. Charles Grassley said that he would reintroduce in the 111th Congress a bill requiring hedge fund advisers to register with the SEC, effectively providing a legislative override of the federal appeals court Goldstein ruling. He said that the bill would be modeled on the Hedge Fund Registration Act, S. 1402, that the senator introduced in May of 2007. That legislation was referred to the Senate Banking Committee but never brought up for consideration.

The Grassley bill would authorize the
SEC to require all investment advisers, including hedge fund managers, to register with the SEC. The bill would, however, exempt investment advisers who manage less than $50 million, have fewer than fifteen clients, do not hold themselves out to the public as investment advisers, and manage the assets for fewer than fifteen investors, regardless of whether investment is direct or through a pooled investment vehicle, such as a hedge fund.

Specifically, the bill would amend section 203(b)(3) of the Investment Advisers Act to narrow the current exemption from registration for certain investment advisers. This exemption is used by large, private pooled investment vehicles, commonly referred to as
hedge funds. According to Sen. Grassley, who is the Ranking Member on the Finance Committee, hedge funds are operated by advisors who manage billions of dollars for groups of wealthy investors in total secrecy. They should at least have to register with the SEC, he emphasized, like other investment advisers do. Read more...

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