SEC To Propose Hedge Fund Registration Rule Friday

Nov 17 2010 | 3:35pm ET

The hedge fund industry on Friday will learn the likely look of the U.S. Securities and Exchange Commission's registration regime.

The SEC plans to meet to propose the registration requirement. It is not the first time the agency has tried to force hedge funds to register: Five years ago, it did so but saw the rule overturned after it was challenged by Bulldog Investors' Philip Goldstein.

The court at the time ruled that the SEC did not have the statutory authority to regulate hedge funds. That is no longer a problem, as the recently-enacted Dodd-Frank law explicitly requires the SEC to force hedge funds and other private funds to register.

On Friday, the Commission is expected to vote to require hedge funds with $150 million or more in assets under management to register. It will also increase to $100 million the minimum level of assets under management for a hedge fund to fall under its jurisdiction. Smaller hedge funds will be left to state regulators to oversee.

Not all hedge funds will face the same scruntiny. The SEC has already proposed allowing family offices to avoid registration. It also may exempt venture capital funds and foreign private fund managers with little or no business in the U.S.


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Chicago-based independent futures brokerage and clearing firm R.J. O’Brien & Associates (RJO) has hired industry veteran Daniel Staniford as Executive Director, responsible for the firm’s institutional business development in New York and London.

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