HedgeOp Compliance, a compliance consulting company, has launched a service to provide registration and compliance infrastructure development for hedge fund managers registering as investment advisers with the US Securities and Exchange Commission (SEC). The service, known as ADVassist, helps funds complete the registration process and helps to create a foundation for development of a compliance infrastructure.

For years hedge fund registration in the US was a looming possibility. Under the Obama administration's financial system regulatory reform plan, most now expect it to be a matter of time before it becomes mandatory.

A number of strongly supported regulation proposals are pending, including a recent proposal from the US Treasury that would require hedge fund managers as well as other private equity and venture capital managers to be registered as investment advisors with the SEC.

The regulations, expected to be signed into law by the end of the year, are expected to be detailed and time consuming. Managers will be required, for example, to establish required IARD (Investment Adviser Registration Depository) accounts, prepare Form ADV part I and draft part II, develop formal compliance procedures (including a written manual and code of ethics) and train employees on the new rules.

Advisers use Form ADV to register as an investment adviser with the SEC. Form ADV also is used for state registration. Generally, an investment adviser that manages $25 million or more in client assets must register with the SEC. Advisers that manage less than $25 million must register with the state securities regulator where the adviser's principal place of business is located.

Form ADV has two parts. Part one contains information about the adviser's education, business and disciplinary history within the last ten years. Part two is filed electronically with the SEC. Part 2 includes information on an adviser's services, fees, and investment strategies. Currently, the SEC does not require advisers to file Part 2 electronically.

ADVassist consists of a number of services including registration and compliance infrastructure development assistance, establishing required IARD accounts and preparation of Form ADV part one and draft part two.

HedgeOp Compliance clients range from start-up managers to large companies with well-established track records. Its business lines include specialised compliance consulting services, patented software and due diligence research and operational due diligence reporting for fund of funds and other institutional investors.