Three months after the Securities and Exchange Commission’s hedge fund registration rule has gone into effect and some of the top names in the industry still have not registered. Twenty-six of the largest 100 hedge funds managing more than $168 billion AUM are in that group, according to Financial News, including Citadel Investment Group, Soros Fund Management, Tudor Investment Corp., Cerberus, Atticus Capital, Moore Capital Management and SAC Capital Partners. Some firms have avoided registration by extending lock-ups or closing funds, which are allowed by law. As one HF marketer told FN, it’s not that the funds have anything to hide; it’s “just they don’t have to go through the burden and expense of registering and so they haven’t.” But if the SEC can’t inspire the biggies to comply, says one prime broker, “the rules will have to change. [The SEC] will have to sit down with these hedge fund managers and find a half-way house.” The hedgies may not be rushing to any such meeting. “There is so much demand for these funds it was no surprise they could extend their lock-up periods to avoid registering,” attorney Kenneth Berman of the law firm Debevoise & Plimpton said in an FN interview. “There has been speculation that institutional investors will want SEC registration as a tick-box requirement but these firms have obviously decided they don’t need to worry about that.”
