The Securities and Exchange Commission is considering requiring fewer hedge funds to register, Financial Times reports. The current rule, which is to go into effect in February, will require hedge fund managers with more than $25 million in assets to register with the SEC. Lori Richards, the SEC director of compliance inspections and examinations, said the SEC has been discussing the possibility of raising the minimum to reduce its oversight responsibilities.
Florence Lombard, executive director of the Alternative Investment Management Association, said she had heard the SEC is considering modifying the rule so that only hedge fund managers with a minimum of $50 million in assets must register with the SEC. If such a change occurs, an additional 1,000 managers will be exempt from the registration rule.
An SEC spokesperson said there is no such proposal before the Commission at this time.
The SEC requirement goes for offshore funds that have U.S. investors as well. Many non-U.S. funds were backing away from offering funds to the U.S. because of the regulation, said David Goldstein, an AIMA member.
"Japanese managers in particular are trying to minimize the amount of U.S. investors' money in their funds; they are not interested in raising U.S. money," Goldstein said. "The SEC is trying to impose its regime around the world. At the same time, there is resistance by the SEC to any reciprocity; they do not want to accept any other regulatory regimes in the U.S."