Revisiting Title IV: Why Mandatory SEC Registration for Hedge-Fund Advisers Is Not Necessary

Dodd–Frank’s Title IV, “The Private Fund Investment Advisers Registration Act,” achieved what the Securities and Exchange Commission (SEC) had tried in vain to do on its own—mandatory SEC registration of advisers to hedge funds.1 Congress, motivated by systemic risk and investor-protection concerns,2 directed the SEC to reinstitute mandatory registration for most advisers to hedge funds and other private funds. In addition, Title IV further limited the pool of potential investors in hedge funds and other private offerings and imposed substantial reporting requirements on private-fund advisers. Title IV will not achieve its objectives of enhancing financial stability and protecting investors—it will impede economic growth instead.