109 HR 5712 IH: Securities and Exchange Commission U.S. House of Representatives 2006-06-29 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 2d Session H. R. 5712 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.

1.

Short title

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

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. .