The deadline for hedge fund managers to register with the SEC is tomorrow, 1st February. In reality you had to have your application in by 11 December 2005 to be sure you would be registered by the deadline! The FT reports that by the end of 30 January, 714 hedge fund managers based in the US and overseas had registered.

The SEC's new registration rule for hedge fund managers was drawn up in 2004 to counter fraud in the industry and to enable the regulator to get a better understanding of hedge fund activities.

Greenwich Associates, a consulting firm, reports that some managers think their costs will increase in 2006 because "there is a large camp of hedge fund managers and other industry observers who believe that registration is merely the first step in what the SEC envisions as a broader regulatory framework for hedge funds."

The Greenwich survey reports that 49 per cent of hedge fund managers think that their compliance costs will rise in 2006, partly because of concerns that the Securities and Exchange Commission’s registration rule will be followed by further supervisory measures.

The rule does not require managers to register if their clients are barred from withdrawing their investments for more than two years and many funds have simply introduced extended "lock-up" periods to avoid the registration requirement.