All hedge funds that manage more than $100 million will be required to register with the SEC and disclose financial data to determine whether fund activities pose a risk to the nation's financial system, under major financial regulatory reform legislation unveiled today by Senate Banking Committee Chairman Christopher Dodd, D-Conn.
According to a bill summary, regulation of money managers with less than $100 million in assets under management would shift to individual state regulation from SEC purview. Under existing law, money managers with more than $25 million in assets under management are required to register with the SEC.
David Tittsworth, executive director of the Investment Adviser Association, said the change would shift about 4,200 of the 11,000 money managers now registered at the SEC to state regulation.
“The impact would be the SEC could come along and inspect your firm a lot more often,” Mr. Tittsworth said.
The massive bill also includes provisions creating a new independent consumer watchdog at the Federal Reserve and would establish a new federal council charged with identifying systemic risks posed by large financial firms.