This past Friday, the House and Senate Conference committee finished reconciling the two versions of the financial reform bill.  Over the coming weeks, more details regarding the bill will become much clearer.  Until then, below is a brief detail of a few of the major items that will affect the investment management community. 

Hedge Fund Registration – Under the new laws, hedge fund managers with assets under management of $100 million or more will be required to register with the SEC.  Additionally, these managers will be required to provide the SEC with certain information related to their trading.

Increased State Authority – Currently managers who have at least $30 million in AUM can register with the SEC.  After the bill goes into effect, that number increases to $100 million.  This means that some managers currently registered with the SEC will have to de-register and then register with the state where the manager resides.

Accredited Investor Standards – The bill would initially adjust the accredited investor standard and then require periodic adjustments over time.  Initially, an investor’s equity in a primary residence will no longer count toward the $1 million net worth requirement.   This may have a negative impact on smaller hedge funds and  small companies who rely on accredited investors for investments.

Next Steps – Once the bill is signed into law by President Obama, the SEC will begin implementation of the new laws.