TY - JOUR T1 - An Introduction to the Investment Advisers Act of 1940 JF - The Journal of Alternative Investments SP - 92 LP - 97 DO - 10.3905/jai.2005.491504 VL - 7 IS - 4 AU - Elizabeth M. Schubert Y1 - 2005/03/31 UR - https://pm-research.com/content/7/4/92.abstract N2 - On December 2, 2004, the SEC issued a rule requiring the advisers to most hedge funds to register with the SEC under the Investment Advisers Act of 1940 (the “Advisers Act”). In short, the Advisers Act requires anyone that receives compensation for advising others about securities investments to register with the SEC and comply with regulations designed to protect investors. Prior to the new rule, advisers to most hedge funds benefited from an exemption from registration which applied to investment advisers that had advised fewer than 15 clients during the prior 12-month period. This article discusses the impact the new rule will have on the hedge fund industry. First, it addresses briefly the initial industry response to the new rule, including speculation about loopholes and possible legislative and judicial challenges. This is followed by a detailed discussion of the new rule and the Advisers Act while emphasizing items that funds need to address to ensure they meet the SEC's compliance deadline and other requirements. ER -