Client Alert

Private Fund Investment Advisers Registration Act of 2009 and Investor Protection Act of 2009 Pass House Financial Services Committee

November 10, 2009

The Investment Management and Private Funds Practices

On October 27, 2009, the House Financial Services Committee approved the Private Fund Investment Advisers Registration Act of 2009 (H.R. 3818) (the Registration Act) by a vote of 67 to 1. The Registration Act was discussed in two prior Paul Hastings Client Alerts (July 27, 2009, available here and September 21, 2009, available here).

If enacted as proposed, the Registration Act would require advisers to hedge funds and other unregistered investment companies (such as private equity funds and certain real estate investment funds; collectively, private funds) to register with and provide information to the Securities and Exchange Commission (SEC). Congressman Paul Kanjorski explained that the goal of the Registration Act is to create a sufficiently substantial inventory of locations of capital to enable any future systematic risk regulator to effectively assess the financial situation and respond. Congressman Kanjorski also stated that reporting costs are expected to be in the range of $5,000 to $15,000 for most private funds, but complicated private funds may incur costs of several hundred thousand dollars.

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