SEC considering new hedge fund regs; Looks to raise investment bar, improve disclosure.(News)

Investment News, November, 2006

Byline: Sara Hansard WASHINGTON - Raising the qualifications for hedge fund investors is one of several rules that the Securities and Exchange Commission is considering in the wake of the U.S. Court of Appeals decision that overturned the 2004 rule requiring more hedge fund managers to register as investment advisers.

Under current SEC rules, in order for a hedge fund to charge a performance fee, as most hedge fund managers do, the investor must have at least $750,000 in the fund, among other requirements. That standard "may be in need of revision upward,'' said Douglas Scheidt, associate director and chief counsel of the SEC's division of investment management. However, since that standard applies only to hedge fund managers who are registered...

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