Hedge Fund Bills

Registration of hedge funds was the reform du semaine last week. On January 29th, Chuck Grassley introduced S. 344, the Hedge Fund Transparency Act. In his introductory statement, Grassley described the bill this way:

It requires them [hedge funds] to register with the SEC, to file an annual disclosure form with basic information that will be made publicly available, to maintain books and records required by the SEC, and to cooperate with any SEC information request or examination.

The other bill, introduced two days before, is so short, I'm pasting it below:

HR 711 IH

111th CONGRESS

1st Session

H. R. 711

To amend the Investment Advisers Act of 1940 to remove the registration exception for certain investment advisors with less than 15 clients.

IN THE HOUSE OF REPRESENTATIVES

January 27, 2009

Mr. CAPUANO (for himself and Mr. CASTLE) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Investment Advisers Act of 1940 to remove the registration exception for certain investment advisors with less than 15 clients.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Hedge Fund Adviser Registration Act of 2009'.

SEC. 2. REMOVAL OF THE PRIVATE ADVISOR EXEMPTION.

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3) is amended by striking subsection (b)(3).

203(b)(3) is below

(b) Investment advisers who need not be registered ...

(3) any investment adviser who during the course of the preceding twelve months has had fewer than fifteen clients and who neither holds himself out generally to the public as an investment adviser nor acts an an investment adviser to any investment company registered under subchapter I of this chapter