THE EXTRATERRITORIAL IMPLICATIONS OF THE SEC'S NEW RULE CHANGE TO REGULATE HEDGE FUNDS.

The article evaluates the decision of the U.S. Securities and Exchange Commission (SEC) to regulate the hedge funds. Even though the SEC has claimed the change as the mildest possible, it has caused a controversy. Republican leaders along with President George W. Bush opposed the new rule. The fund managers are threatening a mass exodus from U.S. to overseas destinations. Hedge funds had a tremendous growth during 90's and by the turn of the century the number had grown to 6000. The near collapse of a hedge fund raised the need for public scrutiny and the SEC began to research and analyze the hedge fund industry which led to the present enactment.