Quotable 2009: Registration costs ‘just too high’

“We don't think that any fund with assets under management of under $50 million can afford to register, the costs are just too high. Under $50 million, forget it, they'll simply have to shut down.”

– David Lerner, partner at law firm Morrison Cohen. By July legislation was working its way through the US Congress that would set the assets-under-management threshold for firms to register with the SEC at $30 million, which would effectively capture nearly all firms under the regulatory umbrella. While later legislative amendments have raised this proposed threshold to $150 million, this still leaves many firms having to prepare for the SEC compliance, including the audit process, in the future.

Excerpted from PEM’s “Executive decision”