SEC commissioners today voted 3-2 to require registration of most hedge fund managers, raise the minimum limits for accredited hedge fund investors and give the SEC examination power over hedge funds. The regulations go into effect Feb. 1, 2006. Current investors who do not meet the new minimum accreditation requirements will be grandfathered.
SEC Chairman William H. Donaldson said an internal task force headed by Charles A. Fishkin, director of the office of risk assessment, will develop a risk-based model for hedge fund company examinations before the regulations go into effect.
Paul F. Roye, director of the division of investment management, said companies that manage hedge funds but whose primary business is management of commodities pools and are registered with the CFTC will be exempt from registration as a hedge fund adviser.
Mr. Roye said the SEC received 153 comments about the proposals during the 60-day comment period: 82 opposed the proposal, 42 raised concerns about issues the SEC should address and 29 supported the proposal. Commissioners Paul Atkins and Cynthia A. Glassman voted against the motion; Mr. Atkins said they will file dissenting comments.