Chicago Tribune – Many hedge funds, the often secretive and lightly regulated investment vehicles for wealthy individuals and big institutions, are hedging when it comes to new rules requiring themto give up some of their privacy.
Starting Wednesday, hedge fund advisers with more than 14 clients and $30 million in assets must register with the Securities and Exchange Commission.
With the deadline looming, the number of funds registering with the nation’s top securities watchdog has barely exceeded the low end of initial estimates when the agency proposed the rules in July2004.
From Jan. 1, 2005, through the close of business Monday, 714 hedge fund advisers have registered, an SEC spokesman said. The SEC originally estimated anywhere from 690 to 1,260 advisers wouldregister under its new rules.
Funds intent on not opening themselves up to more scrutiny are legally trying to sidestep the rules by using exemptions. Loopholes include requiring fund investors to lock up their money for at leasttwo years as well as turning away new investors. Hedge funds not registering include Chicago-based Citadel Investment Group, which for years has had long-term lock-ups of investors’ money andtherefore needn’t register.
