II 110th CONGRESS 1st Session S. 1402 IN THE SENATE OF THE UNITED STATES May 15, 2007 Mr. Grassley introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Investment Advisers Act of 1940, with respect to the exemption to registration requirements.

1.

Short title

This Act may be cited as the Hedge Fund Registration Act of 2007.

2.

Limitation on exemption from investment adviser registration requirements

Section 203(b)(3) of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3(b)(3)) is amended to read as follows: (3)any investment adviser who, during the course of the preceding 12-month period— (A)had assets under management of not more than $50,000,000; (B)had fewer than 15 clients, except that for purposes of determining such number, no shareholder, partner, or beneficial owner of a business development company, shall be deemed to be a client of the investment adviser, unless such person is a client of the investment adviser separate and apart from their status as a shareholder, partner, or beneficial owner; (C)did not manage the assets of more than 15 investors, whether individually, in a pooled investment vehicle described in paragraph (1) or (7) of section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)), or otherwise; and (D)was neither held out generally to the public as an investment adviser nor acted as an investment adviser to any investment company registered under title I, or a company which has elected to be a business development company pursuant to section 54 of title I, and has not withdrawn its election; .