Hedge Funds

SEC drafts new registration law

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The prospects of mandatory registration of all hedge funds has come a step further with the move by William Donaldson, chairman of the Securities and Exchange Commission, to quietly instruct his staff to prepare a law that will oblige all hedge funds to register as investment advisors under the Advisor Act.

Donaldson disclosed his move in a little-noticed aside in a speech on January 7 entitled "America's need for vigilant mutual fund directors," before the Mutual Fund Directors' Forum in Washington. Hidden in the speech he said that he had instructed the staff to "explore steps to provide