WASHINGTON — If the federal government decides to resurrect a regulation requiring hedge fund advisers to register with the Securities and Exchange Commission, Congress will have to pave the way with legislation — and it's unclear whether federal lawmakers will move on the issue.
That was the consensus among hedge fund attorneys in the wake of hearings the week of July 24 on hedge fund regulation before the Senate Banking Committee.
"At least today the sentiment appears to be to leave things as they are," said George Mazin, a hedge fund attorney with the law firm Dechert LLP, New York.
"There's going to be some momentum on the part of Congress, (but) I don't know where it's going to end up," added Nir Yarden, a hedge fund attorney with the law firm Greenberg Traurig, New York.
The feeling that the SEC would not resurrect the registration rule on its own was based on the committee testimony of SEC Chairman Christopher Cox.
Mr. Cox told lawmakers the SEC was taking steps to regulate hedge funds — but might need legislation to patch the "hole" created by a federal appeals court decision in June. That ruling threw out a requirement that hedge fund managers register with the SEC and be available for agency inspections.
"Some improvements will be possible through administrative action; others, however, may well require legislation," said Mr. Cox in his testimony.