Charlotte Business Journal – New rules from the Securities and Exchange Commission, which went into effect earlier this year, required hedge funds with more than $30 million in assets, 15 or more investors and a lock-up period of less than two years to register as investment advisors under the Investment Advisors Act of 1940.
This mandate has created new requirements, including appointing a chief compliance officer, improving record-keeping practices and submitting to periodic audits from the SEC.
However, though hedge funds must register with the SEC, they’re not required to disclose their investments or investment methods, as mutual funds managers must do. The hedge fund industry continues to fight further regulation on grounds that maintaining the secrecy of investments and strategies is crucial to its ability to exploit market anomalies.
The term “hedge fund” has become a lot like the term “mutual fund”; each covers a lot of territory.
