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November 16, 2006
New Rules for Hedge Fund Investors?
-- By Pushpa Sathish, Staff Writer
The US Securities and Exchange Commission (SEC) is changing tactics to prevent occurrences of fraud in the hedge fund industry. After its attempt to get funds to be more transparent in their dealings fell flat on its face, the regulatory body is toying with the idea of raising the bar for those wishing to invest in these funds.
Current requirements mandate that investors be accredited, i.e., they are worth at least $1 million or have an annual income of $200,000 (single) or $300,000 (joint). While the proposed revisions to these rules are still under wraps, Joseph Borg, president of the North American Securities Administrators’ Association which represents state securities regulators, has suggested that potential investors own assets worth at least $2 million, with real estate not be added to the total.
A meeting between the chairman of the SEC, Christopher Cox, and four other SEC commissioners some time next month is expected to hold the answers to all the questions being raised regarding the new investor accreditation rules.
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