Treasury Secretary Henry Paulson wants to beef up hedge fund regulation as part of his plan for a systemic risk regulator, he said Thursday.

“To ensure the market stability regulator can fulfill its role, large, systemically important institutions – including hedge funds – should be required to have a charter that would permit some type of oversight,” Paulson said.

Earlier this year, Paulson’s blueprint proposed creating The Conduct of Business Agency to oversee chartering and operations of financial firms, including secretive hedge funds.

Sen. Charles Grassley (R-Iowa) has said he plans to reintroduce legislation requiring hedge fund managers to register with the Securities and Exchange Commission.

In 2004, a similar registration rule was adopted by the SEC but was later struck down by a federal court. The rule required certain hedge funds to register with the SEC and open their books to periodic examinations.

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