The Securities and Exchange Commission's division of investment management has issued a response to queries from the American Bar Association regarding the U.S. Court of Appeals' decision to overturn the hedge fund registration rule.

SEC Investment Management Associate Director Robert Plaze said his division will not hold hedge fund advisors to the standards set by the overturned rule and its amendments. However, advisors dealing with U.S. investors that are registered with the SEC must abide with the Investment Advisers Act of 1940. Second, the division won't recommend enforcement proceedings against any hedge fund managers that registered but did not preserve their books or records of meetings prior to Feb. 10, 2005, because they were too new.

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