The Developing Regulatory Landscape for Hedge Fund Managers

Many hedge fund managers are dealing with significant regulatory change and uncertainty. As nearly everyone in the hedge fund industry knows, the SEC’s new rule requires most hedge fund managers to register as investment advisers with the SEC by February 1, 2006.1 Other proposed rules and regulatory developments loom. At the same time, some recent SEC examinations and enforcement actions provide cause for caution.

Part I of this article summarizes some recent regulatory developments (both related and unrelated to the new registration rule). Part II discusses what to expect from the inevitable SEC examination when a manager registers. Part III explains the new hedge fund manager registration rule and some of its implications.

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