More Hedge Funds Register Than Originally Expected

Bloomberg reports that more hedge funds will register with the U.S. Securities and Exchange Commission than the SEC first predicted, expanding the reach of one of the most controversial requirements of the Dodd-Frank Act.  The deadline to register with the SEC is tomorrow.

The agency expects to receive about 1,300 registration applications, which is almost double the 750 advisers the agency predicted in  July.   The Office of Compliance Inspections and Examinations, which administers the SEC’s examination and inspection program for registered investment advisers, has hired 60 additional staff in the past 18 months, partly reflecting anticipated scrutiny of hedge funds.

When the SEC completed the registration rule in June it estimated the cost of registration at $9.6 million based on an estimate of 750 advisers spending almost 38,000 hours to comply with the rule.  It looks like that cost estimate was on the low side…

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