California to take on hedge funds?

Investment Dealers' Digest reports that California has proposed a rule requiring hedge funds with $25 million or more in assets and fewer than 15 clients to register with the state. Comments are being accepted on the proposal until Nov. 26. This is the kind of move that will not go over well with the industry. Many states already require hedge funds to register as investment advisors, but there are two huge exceptions: New York and Connecticut. So you have to wonder if this will make California a lot less attractive for funds. Many think funds will simply close shop and move elsewhere. But then again the state has a need to monitor some funds. We'll see.  

For more:
- here's the Investment Dealers' Digest article