Wall Street Journal: Hedge funds are about to come out of the regulatory shadows.
The Senate and House versions of the bill require all hedge-fund advisers over a certain size to register with the Securities and Exchange Commission. That would give the agency a greater window into the trading positions and investment strategies of hedge funds, typically secretive firms that cater to wealthy individuals and big investors.
“There will definitely be an increased level of reporting,” said Steve Nadel, a hedge-fund lawyer in New York, adding that the registration requirement “has the most immediate impact” of any hedge-fund-related provision in the bill.
Lawmakers also are aiming to give the SEC more discretion in its authority over hedge funds, likely leading to deeper scrutiny of the industry’s client base and trading partners, as well as its investments. Although hedge funds have successfully resisted much oversight, some regulators say additional scrutiny is needed to reflect the increased influence of hedge funds on financial markets. The hedge-fund industry has amassed about $1.7 trillion in assets.
