SEC to Hedge Funds: There’s More Than One Way to Skin a Cat

The Securities and Exchange Commission said on Monday that it would not challenge a federal appeals court ruling that overturned its new rules for the oversight of hedge funds.

Because the appellate court’s decision was based on several grounds and was unanimous, “further appeal would be futile and would simply delay and distract from our goal of advancing investor protection,” the S.E.C.’s chairman, Christopher Cox, said in a statement.

But as early as this week, the S.E.C. will introduce an antifraud rule under the Investment Advisers Act that would require more information on hedge fund investors. “At my direction,” Mr. Cox said, “commission staff are also considering whether we should increase the minimum asset and income requirements for individuals who invest in hedge funds.”

Mr. Cox has pushed for emergency regulations on hedge funds, which are high-risk investment pools that have catered to institutions and very wealthy individuals but are increasingly attracting investors with less ability to tolerate risk.

http://www.nytimes.com/2006/08/08/business/08sec.html?_r=1&oref=slogin