In testimony before the Senate Committee on Banking, Housing and Urban Affairs, the Chairman of the Securities and Exchange Commission, Mary L. Schapiro, discussed the Commission’s views on enhancing investor protection through regulation of the securities markets. She stated that the SEC is considering asking for legislation that would require the registration of investment advisers that advise hedge funds, and the registration of hedge funds themselves. The SEC is also considering recommending legislation that would apply the same statutory regime for both investment advisers and broker-dealers, who are now separately regulated even though the services they can provide often are virtually identical from the investor's perspective.

Chairman Schapiro has already requested the SEC staff to prepare a proposal that would require investment advisers with custody of client assets to undergo an annual unannounced third-party audit to confirm the safekeeping of client assets and compliance with the law. Under the forthcoming proposal, a senior officer from each firm will need to attest to the sufficiency of controls of investor assets, and a list of all certifying firms would be publicly available on the SEC's website.  

http://www.sec.gov/news/testimony/2009/ts032609mls.htm