New Private Fund Adviser Registration Legislation Proposals

November 20, 2009

Congressman Paul Kanjorski (D-PA), Chairman of the Capital Markets Subcommittee of the House Financial Services Committee, recently proposed legislation that would require investment advisers to certain pooled investment vehicles, including hedge funds and private equity funds, to register with the SEC, while providing an exemption from registration for investment advisers to venture capital funds, certain small private funds, and small business investment companies. The Kanjorski bill joins a host of others introduced to Congress in response to the financial crisis, and is similar in many respects to legislation proposed by the Obama Administration.

This update examines the key features of the Kanjorski bill and compares it to similar proposals that seek to impose greater regulation on private fund advisers, including legislation recently introduced by Senator Christopher Dodd as part of the “Restoring American Financial Stability Act of 2009.”