The Connecticut Senate has approved a bill titled “An Act Concerning Hedge Funds,” that would require all investment advisors, registered and unregistered, of private investment funds that offer or sell securities in Connecticut or that are located in Connecticut to comply with the disclosure requirements of Rule 204-3 of the federal Investment Advisers Act of 1940, but only to the extent the disclosures relate to material conflicts of interest of the investment advisor. Rule 204-3 requires registered investment advisors to provide each advisory client and prospective advisory client with a written disclosure statement containing at least the information prescribed by Part II of Form ADV. The bill, if finally adopted in its current form, would nominally become effective January 1, 2010, but would not be enforced until the state banking commissioner adopts regulations implementing the law. The bill allows the state banking commissioner to adopt such regulations only if similar federal regulations to regulate investment advisors of private investment funds are not adopted by December 31, 2009. The bill now moves to the state House of Representatives for consideration.  

To view the text of the bill click here.  

See also the February 27, 2009, edition of Corporate and Financial Weekly Digest, discussing separate bills concerning investment funds proposed in the Connecticut General Assembly