House Passes Bill for Hedge Fund Study

October 6, 2006

In the wake of the D.C. Court of Appeals decision overturning the SEC’s hedge fund manager registration rule in Goldstein v. SEC, and following some recent high profile losses by hedge funds, Congress is once again seeking to put the hedge fund industry under the spotlight.  The Hedge Fund Study Act, outlined below, is the second of what will likely be many more initiatives to regulate the hedge fund industry in the coming months.  (The first initiative was a bill proposed by Representative Barney Frank (D-MA) on June 29, 2006 to provide the SEC with the authority to effectively reinstate the hedge fund manager registration rule, although it is unlikely that this bill be passed.)
 
On September 27, 2006, the House passed a bill (H.R. 6079) by voice vote that would require the President’s Working Group on Financial Markets to conduct a study and to make recommendations relating to disclosure requirements for and oversight of the hedge fund industry.  The short title of this bill is the “Hedge Fund Study Act”; it was sponsored by Representative Michael N. Castle (R-DE).

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