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Hedge Fund Regulation

Hedge fund regulation is the new buzz word on Wall Street and in the White House. In the wake of a turbulent economy and millions of people falling victim to financial and securities fraud, the government is looking to stabilize a very shaky ship, captained by broker-dealers and securities advisors. Hedge fund regulation has been a major agenda for many politicians.

On January 29, 2009 the Hedge Fund Transparency Bill was introduced. The bill proposes that all venture capital, private equity, and hedge funds must register with the Securities and Exchange Commission, (SEC) as investment advisors. Proponents of hedge fund regulation believe that all private funds must be regulated in order to protect the damaged economy and stop any further bleeding.

With this type of effort from our government officials, hedge fund regulation seems inevitable for all hedge funds in the very near future, which means they will have to put an exorbitant amount of time and energy to actually register and receive compliance status. In order to become compliant and meet SEC regulations, hedge fund managers will need to incorporate many new tenants into their business plan, a process which is both complex and frustrating.

In order to adhere to hedge fund regulations, the firm should have a Written Supervisory Procedures manual. This manual alone is a massive undertaking and will require much time and effort to complete. Even if purchasing a template form, there should be extensive modifications made to the compliance manual template in order to remain updated and specific to the firm. As part of the firm’s compliance program all files, including representative files, account files, correspondence files, advertising files, costumer complaint files, and new account applications will need to be up to date and accessible to regulators during an audit. All of these files will be examined, including a complete review of the firm's Training Plan, Business Continuity Plan, and Anti-Money Laundering procedures. This is the process of hedge fund regulation.

With all the added stress that comes with hedge fund regulation, no broker-dealer can realistically meet the rising demands of the SEC and FINRA without help. Experts, such as financial accounting consultants, can guide you through the hedge fund regulation process, and are completely up to date with all the latest securities regulations and restrictions.

The regulatory rules are rapidly changing and new legislation is being proposed all the time, so whether you are an investment advisor, broker dealer, or hedge fund, your firm needs a financial accounting and compliance consultant on the front lines who knows the score. Without an expert compliance consultant or legal counsel to advise your company on the latest requirements and manage the long and arduous hedge fund registration process and compliance program, your firm may be destined to receive stiff fines, penalties, and waste valuable time and money.

If you would like to receive more information about hedge fund regulations and how a financial accounting and compliance consulting company can help, please fill out the form to the right of the page and a professional will contact you to arrange a complimentary consultation about hedge fund regulation.

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