Hedge funds continue to deregister

Date: Friday, December 15, 2006
Author: Riva Froymovich, InvestmentNews.com

Dozens of hedge-fund advisers have pulled their registration with the Securities and Exchange Commission in the last three months, according to SEC statistics gathered as of Dec. 7, according to published reports.

This is not necessarily because the funds are shutting down, but simply because they are no longer required to file with the regulator.

After a new SEC rule requiring hedge funds to register with them took effect in February, a court decided in June that the rule was "arbitrary."

Since then, about 275 hedge-fund advisers have removed their registration, reports said.

That is up from 106 that were withdrawn as of Sept. 14, according to reports.

Out of the hedge-fund managers who then registered with the SEC, 1,067 remain registered and haven't filed to withdraw, according to the Wall Street Journal.

Earlier this week, however, the SEC announced proposals that would seek again to rein in the $750 billion industry - but gently.

It proposed prohibiting hedge-fund advisers from cheating investors and raising the minimum assets an investor must have before using a hedge fund to $2.5 million.