H.R. 2586

Securities and Exchange Commission Authority Restoration Act of 2007

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I

110th CONGRESS

1st Session

H. R. 2586

IN THE HOUSE OF REPRESENTATIVES

June 6, 2007

Mr. Capuano introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Investment Advisers Act of 1940 to authorize the Commission to require the registration of hedge fund advisers under that Act.

1.

Short title

This Act may be cited as the Securities and Exchange Commission Authority Restoration Act of 2007.

2.

Authority to limit exemption

Section 203 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–3) is amended by adding at the end the following new subsection:

(l)

Authority To limit exemption

(1)

Authority

The Commission may, by rule or regulation, limit the availability of the exemption provided by subsection (b)(3), and require the registration under this section, of an investment adviser by requiring that certain shareholders, partners, and beneficial owners of, or investors in, clients of the adviser shall also be counted as clients themselves for purposes of such subsection, as the Commission determines necessary in the public interest or for the protection of investors.

(2)

Rule of construction

The treatment of a shareholder, partner, beneficial owner, or investor as a client for purposes of registration under this section shall not affect, and shall not be affected by, the treatment of such persons not as clients for purposes of section 206 or any other section of this title.

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