The Legacy of the Hedge Fund Adviser Registration Rule

At this time last year, many hedge fund managers were either preparing to register as investment advisers with the Securities and Exchange Commission (the “Commission”) or restructuring their business to avoid the registration requirement that came about as a result of the Commission’s amendments to Rule 203(b)(3)-1 (the “Rule”) of the Investment Advisers Act of 1940 (“Advisers Act”).  However, those amendments were struck down by the U.S. Court of Appeals less than six months after hedge fund managers were required to comply with them.  Many hedge fund managers are left to wonder what will happen next.