Hedge Funds - State Regulation

A hedge fund has to look at the state securities laws of each state having residents to whom it intends to offer and sell interests in itself.

Generally, the states have registation exemptions similar to SEC Reg D. These generally require the filing of some type of notice with the state and the payment of a filing fee.

In addition a state may have its own "home brew" registration exemptions. These vary greatly from state to state. Some of these exemptions require filings and fee payment. Others do not require any such filings.

A fund must be aware of these state laws and comply with them. The general effect of non-compliance with a state's laws is that investors resident in that state will have a right to rescind their investment with the non-complying hedge fund.