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SEC Raising The Bar For Hedge Funds

Wednesday, 13 Dec 2006 | 2:01 PM ET

The S.E.C. is meeting right now to vote on a key proposals that could have a major impact on the hedge fund industry. CNBC’s Hampton Pearson had all the details on today's "Power Lunch."

Hampton said essentially the S.E.C. is looking to raise the bar on hedge fund investment.

Currently hedge funds need to have $200,000 income or $1 millionin net worth. The SEC wants to raise that number to $2.5 millionin investments excluding personal residence.

Whatever is approved by the commission today will then be open to public comment before a final change in policy is adapted.

Hampton Pearson also reported that earlier the commission took action on a new rule that will ease small business auditing requirement under The Sarbanes-Oxley Act.

The plan will let small business be the subject to the standard that, in plain English, means they only have to exercise controls that could have a material impact on their financial statement.

S.E.C. Chairman Christopher Cox said that increasing competitive of U.S. financial markets and greater transparency for investors are really the common themes for today’s agenda.

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Kenny Polcari