Will Asian hedge fund managers with U.S. investors have to register with the SEC?
Goldstein: The new SEC rules will require an offshore hedge fund manager to register with the SEC if it has 15 U.S. clients or more. The new rules will be effective from February 2006. In the past, most hedge funds have escaped SEC registration because of the exemption for funds with less than 15 U.S. clients. What the new rules have changed is the definition of a ‘client.’ Before, each private fund invested with an investment advisor was counted as one client. The new rules now require non-U.S. investment advisors to look through any non-U.S. private funds and count each U.S. investor in the fund as a client for the purposes of registration. For example if a fund of hedge funds is the investor in an Asian hedge fund, each U.S. resident investor in the fund of hedge funds is considered as one client for the purposes of registration. FA: If U.S. institutions invest in Asian hedge funds through offshore entities, will they still be counted as a U.S. client? Goldstein: The look-through pr
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