SEC To Approve Hedge Fund Registration Rule Today

Jun 22 2011 | 10:21am ET

The Securities and Exchange Commission will today make officially what has been inevitable for quite some time, voting to require hedge fund managers to register with the agency.

Under the new rule, required by the Dodd-Frank financial services regulation overhaul, all fund managers with more than $150 million in assets under management will have to register and will be subject to surprise examinations. The rule would close an existing loophole that exempts managers with fewer than 15 clients.

But the SEC, already stretched for funds and staff, is punting the issue of smaller hedge fund managers to the state regulators. In fact, according to SEC Chairman Mary Schapiro, the agency will, in fact, oversee fewer firms than before, just 750. Some 4,100 smaller hedge funds will be deregistered and handed over to their local state authorities.

“Even though we are losing in numbers, in terms of amount of assets under the SEC’s oversight, it doesn’t really change,” Schapiro said yesterday. In fact, “there will be more complexity and more investor dollars at risk.”

While it is passing the registration rule today, the SEC said in April that it does not expect to begin registering firms in earnest until next year.

The registration requirement is only the beginning of the SEC’s new authority over alternative investment firms. The regulator plans to require more detailed disclosure from hedge funds and private equity funds in a future rule.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.