A Connecticut bill that sought to impose transparency regulations on hedge funds in the state has effectively died for the time being as the state House of Representatives failed to hold a vote on the measure before the end of the 2009 normal legislative session on June 3. The proposed bill, "An Act Concerning Hedge Funds," passed the Connecticut Senate on May 26 by a 24-12 vote and would have required fund managers and other investment advisers that have not registered with the SEC to alert investors to any material conflicts of interest. SEC-registered advisers are already required to disclose such conflicts.
State Representative Ryan Barry (D), co-chairman of the Joint Committee on Banking and the bill's co-sponsor, said in an interview that he had the requisite votes for passage but could not bring the bill to the floor before the session concluded. Although the clerk's office said on June 4 that it remained unclear whether the measure could be taken up in special sessions, lawmakers stated that the bill would not be revived in special sessions because it is not related to the state budget. Rep. Barry noted that he expects to bring the bill up again next year. It is possible that, absent the passage of any federal regulation of private funds or their advisors in the intervening time, any future versions of the bill may include more aggressive provisions.
Text of the Bill Passed in Connecticut's Senate: Available here (HTML)
Related Story: Hedge-Fund Measure Dies in Connecticut, Wall Street Journal (June 6, 2009)