Grassley And Levin Propose The Hedge Fund Transparency Act

With the backdrop of the financial crisis, Senator Carl Levin, a Michigan Democrat, and Charles Grassley, an Iowa Republican, introduced a bill yesterday that, if passed, would dramatically change the requirements currently applicable to unregistered private investment funds by subjecting them to the Investment Company Act, requiring certain private investment funds to register with the Securities and Exchange Commission (the "SEC"), establish anti-money laundering programs and report suspicious transactions.

While introducing the bill on the Senate floor, Senator Levin made it clear that he thinks the time has come for Congress to establish clear authority for federal regulation and oversight of hedge funds. Senator Levin stated, "the problem is that hedge funds have gotten so big and are so entrenched in U.S. financial markets, that their actions can now significantly impact market prices, damage other market participants, and can even endanger the U.S. financial