The History of Hedge Fund Regulation in the United States

The hedge fund industry in the United States evolved from a niche market participant in the early 1950s to a major industry operating in international financial markets. Hedge funds in the United States were originally privately-held, privately-managed investment funds, unregistered and exempt from federal securities regulation. With increasing investor demand and significant growth of the hedge fund industry came a tectonic shift in the regulatory framework applicable to the industry. The book chapter summarizes the regulatory evolution of the hedge fund industry