The U.S. Securities and Exchange Commission (SEC) has registered 1,504 advisers to hedge funds and other private funds since registration became mandatory under Dodd-Frank.
The SEC says 2,557 advisers previously had voluntarily registered with the securities regulator, bringing the total number of advisers to private funds registered to 4,061.
The regulator says 37% of the 11,002 investment advisers it has registered are advising hedge funds and other private funds.
The deadline for advisers to private funds to register with the SEC was March 30. U.S.-based advisers with more than $150 million in assets under management are required to comply. At the time, the SEC said it expected around 1,300 private fund advisers to register.
As a trade-off for having to register with the SEC, the 80-year ban on hedge fund solicitation has been lifted following an order in the U.S. JOBS Act. While the act has been approved and signed into law, full details of the rules regarding hedge fund solicitation are still being worked out. However, some hedge funds are already gearing up advertising campaigns.
Prior to the Dodd-Frank Act, regulators only saw a slice of the pie but didnt know how big the pie even was, SEC Chairman Mary L. Schapiro said in a statement. The law enables regulators to better protect investors by providing a more comprehensive view of whos out there and what theyre doing.
In addition to requiring larger funds to register with the federal SEC, Dodd-Frank also mandated that mid-sized advisers, or those managing less than $100 million of assets, be registered with state regulators. The SEC says 2,300 such advisers have transitioned to state oversight.
Working together throughout the switch, state securities regulators and the SEC have demonstrated the effectiveness and efficiency of government regulation of investment advisers, A. Heath Abshure, Arkansas Securities Commissioner and president of the North American Securities Administrators Association, said in a statement. The vast majority of switching advisers have made a smooth transition to state regulation, and we are committed to working with those firms that continue to diligently pursue their state investment adviser registrations.
(CG)