Proposed Legislation Would Require Registration and Public Disclosure Regarding Private Investment Fund

On January 29, 2009, Senators Charles E. Grassley and Carl Levin introduced “The Hedge Fund Transparency Act”, which, if enacted, would significantly increase the federal government’s oversight of hedge funds and other private funds (including, private equity and venture capital funds) with at least $50 million of assets under management by requiring these funds to register with the SEC, comply with certain reporting and public disclosure requirements and establish anti-money laundering programs. The proposed bill, which is a revised version of a previous bill introduced by Senator Grassley two years ago (but which Congress did not act upon), has been referred to the Senate Banking Committee for consideration.

Below is a memorandum summarizing the key aspects of the proposed bill as well as the most significant issues raised by the proposed legislation.