MarketWatch- It isn’t just wildfires that are sending people fleeing from the state of California. Proposed new hedge funds rules may push operators out of state to avoid oversight.
Hedge fund managers that have fewer than 15 clients and more than $25 million under management would be required to register with the state if they are not already registered with the Securities and Exchange Commission, trade newspapers are reporting, and that is making investment professionals antsy.
Investment News, a trade publication for investment advisers, for example, says, “the move to register hedge funds could spur relocations.” There are about 500 hedge funds with less than $25 million in the state, it notes.
Hedge funds with more than $25 million, and that have more clients or that hold themselves out as investment advisers according to certain state conditions, already must register. The 15 client rule with less than $25 million cap has been an exemption to that registration requirement.
The idea is to bring all hedge fund advisers under closer state supervision, according to state officials.
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