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HR 2586 IH

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

June 6, 2007

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

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

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

SEC. 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.'.