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SEC brings in hedge funds registration

Thursday 23 June 2011 – by Nicola York

US hedge fund advisers that previously operated “under the radar” will now have to register with the Securities and Exchange Commission after new rules were brought in on Wednesday.

Setting out the rules, SEC chairman Mary Schapiro said they will “fill a key gap in the regulatory landscape” by implementing core provisions of the Dodd Frank Act.

The rules establish reporting requirements for certain advisers and reallocated regulatory responsibility for investment advisers to hedge funds and other private funds between the SEC and states.

There is a transitional exemption period so that those private advisers – including hedge fund and private equity fund advisers – who are now required to register have until 30 March 2012 to do so.

Rules around exemptions for venture capital fund and certain private fund advisers are effective 21 July 2011.

Schapiro said: “In particular, our proposal will give the Commission, and the public, insight into hedge fund and other private fund managers who previously conducted their work under the radar and outside the vision of regulators.”

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