[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5712 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 5712

     To amend the Investment Advisers Act of 1940 to authorize the 
  Commission to require the registration of hedge fund advisers under 
                               that Act.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 29, 2006

    Mr. Frank of Massachusetts (for himself, Mr. Kanjorski, and Mr. 
   Capuano) introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
     To amend the Investment Advisers Act of 1940 to authorize the 
  Commission to require the registration of hedge fund advisers under 
                               that Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securities and Exchange Commission 
Authority Restoration Act of 2006''.

SEC. 2. AUTHORITY TO LIMIT EXEMPTION.

    Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3) is amended by adding at the end the following new subsection:
    ``(l) Authority to Limit Exemption.--
            ``(1) Authority.--The Commission may, by rule or 
        regulation, limit the availability of the exemption provided by 
        subsection (b)(3), and require the registration under this 
        section, of an investment adviser by requiring that certain 
        shareholders, partners, and beneficial owners of, or investors 
        in, clients of the adviser shall also be counted as clients 
        themselves for purposes of such subsection, as the Commission 
        determines necessary in the public interest or for the 
        protection of investors.
            ``(2) Rule of construction.--The treatment of a 
        shareholder, partner, beneficial owner, or investor as a client 
        for purposes of registration under this section shall not 
        affect, and shall not be affected by, the treatment of such 
        persons not as clients for purposes of section 206 or any other 
        section of this title.''.
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