It appears as though the ill-fated SEC hedge fund registration requirement will have a lasting effect on many in the hedge fund industry. A new report from Greenwich Associates (Greenwich, Conn.) argues that despite being overturned in June, the SEC rule requiring hedge funds to register already has resulted in significant cost increases in compliance staff (14 percent), upgraded technology (25 percent), best practice implementation (29 percent) and the installation of monitoring procedures.
Greenwich Associates surveyed senior managers from 47 hedge funds, 70 percent of which already were registered with the SEC. Of those registered, 27 percent do not plan to de-register as a result of the federal appellate court's ruling that struck down the hedge fund regulation. The report notes that respondents believed de-registration could send the wrong message and appear as "flip-flopping" to investors. <<<