In an article published today in the Wall Street Journal, Bart Mallon of Cole-Frieman & Mallon LLP was quoted discussing the current and future role of the state securities divisions with respect to hedge funds. After the implementation of the new SEC registration thresholds under Dodd-Frank, previously SEC registered hedge fund managers will be required to de-register from the SEC and register with the states. Outside of the logistical hurdles involved with this process, the central issue for managers and investors is whether the states have the resources or expertise to deal with an increased workload. This is an especially important question as more and more states like California face budget shortfalls and institute furlough days.
For more information on this specific topic, please see our survey on state securities divisions which includes information on number of examiners, number of furlough days, and the frequency of audits of investment advisers.
The Wall Street Journal article can be found here.
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Cole-Frieman & Mallon LLP provides legal support and hedge fund start up services to all types of investment managers. Bart Mallon, Esq. can be reached directly at 415-868-5345.