SEC Proposes Hedge Fund Registration

Nov 22 2010 | 9:34am ET

The Securities and Exchange Commission will require hedge fund and other private fund managers to provide a whole host of new information under a new rule proposed last week.

The SEC proposal will give shape to some parts of the recently-enacted Dodd-Frank financial regulation reform law, including a new requirement that hedge funds register with the regulator. Under the new rule—which faces a 45-day comment period following the Commission's official proposal of it on Friday—most of the new regulatory burden will fall on hedge funds with assets of at least $150 million.

The agency proposed doing away with the private adviser exemption, requiring all such funds—with the exception of venture capital funds and most family offices—to register with it if they are large enough. Hedge funds will be required to disclose basic information, including assets under management and the types of investors in the fund, as well as its auditors, prime brokers, custodians, administrators and marketers.

Advisers themselves will have to provide more information as well, including about their employees, potential conflicts of interest such as soft-dollar deals, and advisory activities. Such firms may have to register even if they manage less than $150 million or exclusively venture capital funds.

The new rule also changes the SEC's pay-to-play regulations in the wake of a scandal at the New York State Common Retirement Fund.

The SEC voted 4-1 to propose the rules, with only Republican Commissioner Kathleen Casey dissenting over the collapsing of "a carefully wrought distinction between registered advisers and exempt advisers." But even Casey was effusive about the venture capital exemption.


In Depth

Change In 'Accredited Investor' Definition Could Hurt Crowdfunding Space

Jul 25 2014 | 8:14am ET

The Securities and Exchange Commission is considering changes to its 30-year-old...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

The Truth About Track Record Portability

Jul 24 2014 | 5:55am ET

The number of private funds converting to mutual funds has increased significantly...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note