Do I Need to Be a Registered Investment Advisor to Form a Hedge Fund or Private Equity Fund?

Whether you need to obtain licenses or registration depends on a number of factors, including the role you/your firm will play in management of the fund, the state in which the fund (and/or the management firm) operates, and the type and total value of assets under management. Given the complexity of overlapping state and federal regulations, this is a particular area in which experienced legal counsel is important. For example, the Series 65 exam may be required, along with formal registration as an Investment Adviser with the SEC or a state agency. However, for funds that will trade in futures contracts including foreign exchange futures, the Series 3 or Series 34 exam may be required, along with registration as a Commodity Pool Operator or Commodity Trading Advisor with the Commodity Futures Trading Commission (CFTC).

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