Citigroup has uncovered that over one third of the big $1 billion-plus hedge funds have not yet registered with the SEC.
Their research found that out of 220 hedge funds with $1 billion or more in AUM, 82 still hadn’t registered with the SEC. That’s isn’t to say they won’t. But it does mean a sizeable chunk of investor money is in unregulated funds right now.
Large hedge funds have until July 21, 2011, to register, under terms of the new Dodd-Frank Act. A registered fund has to provide more details about such things as prime broker relationships, custody structures and conflicts of interest, according to Sandy Kaul, head of business advisory services for Citi Prime Finance.
Any hedge fund domiciled in the U.S. with more than $150 million in assets under management is required to register. Investment advisors with up to $100 million in AUM will be required to register in their principal state, unless the state doesn’t require it, in which case they have to register with the SEC as well.
Foreign managers, IAs with less than $25 million, and family offices are exempt (as long as the family offices have no other clients than the families they serve).
This opens up new hedge fund job opportunities for Chief Compliance Officers, who will be responsible for ensuring that their funds have the strategies and infrastructure to enable the SEC to monitor operations, says Business Insider. If a fund wishes to raise money from the big institutional investors such as pension funds, and many do, they’ll have to hire a CCO.
A quick search on JobSearchDigest turned up 65 positions related to compliance, including a Chief Compliance Officer based in New York City, paying $300,000 base salary. In this position, you would oversee, implement, review, and update the hedge fund firm’s compliance policies and procedures and pioneer the registration process. BS in finance and 10+ years experience at another hedge fund are required.
What about you? Would you be interested in working in compliance? Or, is your firm beefing up its compliance department in anticipation of increased SEC scrutiny? Add your comments below.