The SEC will require advisers to hedge funds and other private fund managers to register with the agency under rules adopted Wednesday by the agency as part of its implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Advisers to non-U.S. funds, venture capital funds and private funds with assets less than $150 million are exempt, but will still have to file periodic updates. Shifting some responsibility to state regulators, the SEC also voted to raise the threshold for when advisers fall under federal regulation to $100 million in assets under management from $25 million.
Until now, advisers with less than 15 clients did not have to register with the SEC because of a statutory exemption that the Dodd-Frank Act eliminated.
“Today's rules will fill a key gap in the regulatory landscape,” Mary Schapiro, SEC chairwoman, said after the vote. “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.”
The agency also extended the registration deadline to March 30, 2012, from July 21, the date set by the Dodd-Frank bill.
“We are pleased that the (commissioners) recognized (that) they needed to provide additional time for the industry to fully comply with these new regulatory standards, given that certain aspects of the rules required further clarification,” Richard Baker, the Managed Funds Association's president and CEO, said in a statement. “MFA supports registration of private fund investment advisers, and while we will be reviewing the details of the new final rules, we are optimistic that the commission's actions today will provide greater clarity and sufficient time for our members as they work to fully comply with these rules.”