In a recent speech, SEC Commissioner Elisse Walter asked the SEC to consider implementing substantive review of investment advisers before allowing registration.  She said that the SEC should implement a “vetting process” to review a registrant’s legal, operational, and financial capacity to conduct its business.  As an example, she suggested a process similar to the one required of new broker-dealers.  She also indicated that the SEC should consider imposing financial requirements on advisers.  Commissioner Walter also expressed support for a more detailed fiduciary standard that prohibits certain conflicts rather than merely requires disclosure.  She also reiterated her support for an SRO to regulate advisers.

OUR TAKE:  Hedge and private equity managers might want to consider expediting the registration process and finish the process before the SEC makes registration more difficult.

 http://www.sec.gov/news/speech/2011/spch021011ebw.htm