June 23, 2006

US Court Against Hedge Fund Registration Rule

A federal appeals court has thrown out the Securities and Exchange Commission's hedge fund registration rule. The rule says that the rule was arbitrary because it required funds to register if they had 15 or more clients. The ruling came from the US Appeals Court for the District of Columbia. The court observed that the number of investors in a hedge fund revealed nothing about the scale or scope of the fund's activities. The SEC had begun requiring most US hedge funds with more than $30 million in assets and 15 or more clients to register with the agency. However, after the latest ruling by the court, the registration rule will be cancelled.

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