SEC Gets Wave of Hedge Fund Adviser Registrations

More than 1,500 hedge fund and private equity funds have registered with the U.S. Securities and Exchange Commission since the 2010 Dodd-Frank Wall Street reform law was enacted.

The law for the first time required hedge fund and private equity funds to register with the SEC, giving the agency a better view of the size of the fund industry and the identity of those involved. Including the 2,557 private advisers who previously registered voluntarily, the SEC said on Friday [Oct. 19] it now has a total of 4,061 private fund advisers on file.

“Prior to the Dodd-Frank Act, regulators only saw a slice of the pie but didn’t know how big the pie even was,” said SEC Chairman Mary Schapiro in a statement. “The law enables regulators to better protect investors by providing a more comprehensive view of who’s out there and what they’re doing.”

SEC examiners last week launched a new initiative to conduct risk-based exams of fund advisers over the next two years to ensure compliance with the law. Among the areas being examined include marketing materials, portfolio management, conflicts of interest, safety of client assets and valuation.

Although the SEC gained a lot of additional responsibility for overseeing private fund advisers from Dodd-Frank, the law also required oversight of mid-sized advisers to be shifted to the states.

The SEC said that 2,300 of these mid-sized advisers managing less than $100 million have made the transition to state regulation.

Heath Abshure, the Arkansas Securities Commissioner and president of the North American Securities Administrators Association, said in a statement that the switch has been “smooth” for the vast majority of advisers.

The agency also issued a notice identifying another 293 advisers who are no longer eligible for SEC registration because they manage less than $100 million or have failed to comply with other SEC requirements.

Read More: Reuters

 

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