On June 17, 2009, the Obama administration issued a "white paper" proposing changes to the financial regulatory system. The proposals include new regulations for hedge funds and private equity and venture capital funds ("private investment funds"). Under these proposals:

  • Advisers to private investment funds having assets under management exceeding "some modest threshold" would register with the SEC;
  • Private investment funds advised by an SEC-registered adviser would be subject to recordkeeping, disclosure and reporting requirements (some requirements "may vary across the different types of private pools");
  • Certain information included in reports to the SEC would be confidential, but the SEC could share the reports with the Federal Reserve for its expanded supervisory purposes; and
  • The SEC would be authorized to conduct periodic examinations of private investment funds.

The full text of the administration's white paper is available at the following link:


There are other proposals pending. As reported in our Alert of April 14, 2009, the Hedge Fund Transparency Act of 2009, introduced by Senators Carl Levin (D-Michigan) and Charles Grassley (R-Iowa), would require the registration and limited regulation of private investment funds with the SEC under the Investment Company Act of 1940. The Hedge Fund Adviser Registration Act of 2009, introduced by Congressmen Michael Capuano (D-Massachusetts) and Michael Castle (R-Delaware), would remove the current exception from registration for advisers with fewer than 15 clients. This House bill would require most advisers to private investment funds to register with the SEC, but it would not require registration of the funds themselves. The Private Fund Transparency Act, introduced on June 17 by Senator Jack Reed (D-Rhode Island), would remove the same exception and require most domestic advisers to private investment funds to register with the SEC. This bill would also make the records of the private investment funds advised by these advisers subject to SEC scrutiny but only if the adviser or an affiliate sponsored the fund or acts, in effect, as its distributor.