WASHINGTON (HedgeWorld.com)?The U.S. Securities and Exchange Commission released its long-anticipated report on hedge funds, recommending that hedge fund advisers be required to register with the commission.
The SEC report, called ?Implications of the Growth of Hedge Funds,? also recommends general solicitations be allowed for investors considered to be qualified purchasers as defined by the commission, which requires investable assets of US$5 million.
The recommendations would need approval from the commission itself in order to become effective. The 134-page report is downloadable at www.sec.gov.
In addition to adviser registration, the staff report urged the SEC commission and National Association of Securities Dealers to monitor closely capital introductions and recommended that the commission improve education.
A concept release also could be forthcoming on the matter of registered hedge funds.
The SEC is hoping to use the threat of examination and, in the future, improved technology to enforce its rules. Advisers would be required to fill out an ADV form and possibly a separate hedge fund disclosure form.
?We think the specter of an SEC analysis will lead to a culture of compliance within these organization,? said Paul Roye, director, division of investment management in the SEC. The Internal Revenue Service by no means examines everyone, and the SEC could use a similar targeted-approach in its examinations, SEC officials believe.