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SEC Votes to Propose Requirement that Hedge Fund Advisers Register Under Investment Advisers ActFOR IMMEDIATE RELEASE Washington, D.C., July 14, 2004 The Securities and Exchange Commission today voted to publish for comment proposed new Rule 203(b)(3)-2 that would require hedge fund advisers to register with the Commission under the Investment Advisers Act of 1940. The Commission also voted to propose related rule amendments. The Commission's staff estimate that approximately 40 to 50 percent of all hedge fund advisers are currently registered with the Commission. Registration under the new rule would permit the Commission to
The proposed new rule would require advisers to "private funds" to register with the Commission by requiring the advisers to "look through" the funds and to count the number of investors (rather than the fund) when determining whether the advisers are eligible for the Adviser Act's exemption for advisers with 14 or fewer clients. A "private fund" would be one that
The proposed rule would contain special provisions for advisers located outside the United States designed to limit the extraterritorial application of the Advisers Act to offshore advisers to offshore funds that have U.S. investors. Comments on the proposed provisions should be submitted to the Commission by September 15, 2004. The full text of the detailed release concerning this proposal will be posted to the SEC Web site as soon as possible.
http://www.sec.gov/news/press/2004-95.htm
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