Following the federal appeals court overrulling of an SEC rule requiring hedge funds to registering with the agency as “investment advisers” under the 1940 Investment Company Act, Sen. Charles Grassley, R-Iowa, has offered an amendment which would force hedge fund advisers to register with the Securities and Exchange Commission.
“My amendment gives Congress a good opportunity to say there should be greater transparency with hedge funds,” says Grassley.
“Today the average Joe has a stake as pension funds are invested in hedge funds,” he adds.
The senator’s move comes two weeks after a presidential group decided to issue no new rules for the $1.4 trillion industry.
Hedge funds have become the subject of intense regulatory and congressional interest. Back in December, the SEC proposed that investors have at least $2.5 million in assets, excluding their homes, to be eligible to buy into a hedge fund. That’s an increase from the current $1 million in net worth, which includes real estate, or earnings of at least $200,000 a year.
But lawmakers including Grassley aren’t satisfied with current rules.
“Right now a hedge fund isn’t required to report even basic information about who runs the fund,” Grassley complains.