SEC Proposes Anti-Fraud Rule for Hedge Funds
In a meeting on December 13, 2006, the Securities and Exchange Commission voted to propose a new anti-fraud rule that would apply to advisers of certain pooled investment vehicles, including hedge funds. On December 27, 2006, the SEC published the proposal which would prohibit advisers to pooled investment vehicles from making false or misleading statements or otherwise defrauding investors or prospective investors.
The rule also proposes revising the definition of "accredited investor." As reported in the December 22, 2006 Weekly Report, accredited investors (those eligible to invest in hedge funds), must have a net worth of $1 million (including the value of the investor's home) or have an income greater than $200,000 in two consecutive years ($300,000 for a couple's combined income). In its rule, the SEC is proposing accredited investors must also have $2.5 million in investable assets, thereby conceivably reducing the number of eligible hedge fund investors. The Steering Committee of the AMG will review this proposal (link provided below).
Comments on this proposal are due by March 9, 2006.
AMG to Conduct Q&A Sessions with Service Providers
As part of its ongoing effort to inform industry members of technology trends and developments, the Asset Management Group will conduct and publish a series of Q&A sessions in this Weekly Report (beginning on January 26, 2007) with representatives from the service provider community. Topics to be addressed include general business trends, overall thoughts on technology in the current marketplace, opportunities for increased automation (especially concerning derivatives), the demand for real-time data and developments relating to STP, order management and best execution. Please contact the staff if you would like to suggest senior executives to be interviewed as a part of this series.