The hedge fund industry is on the verge of significant regulatory changes. A recently adopted U.S. Securities and Exchange Commission rule has narrowed the exemption thathedge fund managers have relied on to avoid federal registration.
The new rule will result in many hedge fund managers registering for the first time with the SEC by Feb. 1, 2006. The new registration rule is not without controversy–theSEC is sharply split on its merits, and a lawsuit is currently pending in federal court seeking to have the rule overturned.
The costs of registration to a hedge fund manager are significant.
