All investment pools with at least $100 million in assets — including hedge funds, private equity funds and venture capital firms — would be required to register with the SEC under an amendment to the financial regulatory reform bill introduced Monday by Sen. Jack Reed, D-R.I.
The legislation, backed by Senate Banking Committee Chairman Christopher Dodd, D-Conn., and currently being debated in the Senate, requires only hedge funds to register with the SEC.
The $100 million threshold is the same used in the current Senate bill, Mr. Reed said during a conference call.
Money tends to flow into unregistered parts of the market because investors want the lack of transparency and flexibility, Mr. Reed said. Registration will give SEC regulators “better information on the risk taken … by private pools of capital.”
Mr. Reed said that during Senate hearings last year, representatives of the private equity and hedge funds indicated they “did not object to registration.”