SEC to Supervise Hedge Fund Industry - New York Times: "Today some 7,000 hedge funds in the United States command an estimated $750 billion to $1 trillion in assets and leave a wide footprint in the financial markets, as they are believed to account for as much as 20 percent of all U.S. stock trading. They're about to be brought under new supervision by federal regulators concerned about their explosive growth and virtually unbridled operations.
But some big hedge funds are using a loophole to get around the new oversight, and the new regulation itself is being challenged in the courts.
Under a rule that bitterly divided the five-member Securities and Exchange Commission when it was adopted in October 2004, a new regime begins on Wednesday for these high-risk, largely unregulated and secretive investment pools"
"Under the SEC rule, most hedge fund managers now must register with the agency. That opens the funds' books to SEC examiners and makes them subject to an array of regulations including accounting and disclosure requirements. The examiners will be able to conduct inspection ''sweeps'' of hedge funds.
Thousands of hedge fund managers have already voluntarily registered. "
(If you are in my Portfolio class, this one is required! ;) )