SEC rule adds costs to hedge funds
Washington, DC – Many asset managers have had to double their staff to meet compliance requirements, under a new rule that requires certain hedge funds to appoint a chief compliance officer and register with the Securities and Exchange Commission (SEC), according to a study by the CFA Institute and the Investment Adviser Association (IAA).
The survey, released in early November, shows that advisory firms have sometimes doubled their staff and are committing additional resources to comply with new regulations under the Investment Advisers Act. Their compliance costs more than doubled between 2004 and 2005.
The average expenditure increased by 54% in 2004, rising from $144,394 to $221,900 in 2005. The average anticipated compliance costs for 2006 are $247,776, an increase of more than 11% from 2005. When asked to estimate the total
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