More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
Senator Chuck Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee, introduced the Hedge Fund Registration Act on May 15, legislation that would require hedge funds to register with the SEC. Grassley's bill comes on the heels of a D.C. Circuit Court of Appeals ruling last year that overturned the SEC's rule requiring such registration.
The Act "would enable the Securities and Exchange Commission to do what it was already trying to do," Grassley said in introducing the bill, and "gives members of Congress the opportunity to say there should be greater transparency with hedge funds."
Grassley surveyed federal agencies about hedge fund transparency last October. Earlier this year, he joined in requesting a review by the Government Accountability Office of the scope of public and private pension plan investments in hedge funds and what returns and risks are likely for worker retirement funds. In March, Grassley filed legislation similar to the legislation introduced today as an amendment to S.4, the 9-11 homeland security legislation.