Saturday, 15 July 2006 21:00
While the SEC can’t require most hedge fund managers to register, the agency is expected to crack down on aspects of the hedge fund world within its jurisdiction. Section 206 of the Investment Adviser’s Act applies to all advisers and allows the SEC to ensure that managers are not acting in a fraudulent or deceptive manner. This means that the SEC is likely to seek more information from manager’s regarding side letters, side pockets and the valuation of hedge fund interests. In fact, in an article by Business Week, industry insiders are predicting that the express prohibition of side letters.
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