A federal appeals court on Friday threw out the Securities and Exchange Commission's hedge fund registration rule, saying it was arbitrary because it required funds to register if they had 15 or more clients.
"The number of investors in a hedge fund - the 'clients'
according to the commission's rule - reveals nothing about the
scale or scope of the fund's activities," the U.S. Appeals
Court for the District of Columbia said.
On Feb. 1, the SEC began requiring most U.S. hedge funds
with more than $30 million in assets and 15 or more clients to
register with the agency.
Copyright Reuters 2006.
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