Hedge Funds Flee SEC Registration

Jul 10 2007 | 1:46pm ET

It’s been a year since Bulldog Investors’ Phillip Goldstein won his battle with the Securities and Exchange Commission over its hedge fund registration requirement, and, the SEC’s hopes notwithstanding, hedge funds are voting with their feet. About 500 fewer hedge funds are registered with the regulator today than were one year ago—a 21% decline. The Commission had expressed hope at the time of the Goldstein decision that hedge funds would choose to remain registered even though the requirement had been struck down.

SEC spokesman John Nestor said there are 1,977 hedge funds currently registered with the agency. Last year, the figure was roughly 2,500.

In 2004, then-SEC Chairman William Donaldson pushed the requirement through the commission with the support of its two Democratic members in the face of the virulent opposition of his two fellow Republicans. Last June, the U.S. Court of Appeals in Washington, D.C., rejected the move, saying the SEC had overstepped its authority. Efforts in Congress to specifically empower the SEC to register hedge funds have thus far failed to win enough support to become law.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...