SEC to raise requirements for hedge funds

In the wake of Amaranth's collapse, the SEC is considering steps to protect retail investors who have found their way into similar funds. The agency just might change the eligibility-to-invest criteria for hedge funds by raising the amount necessary to be considered an "accredited" investors. Anyone with a net worth of $1 million or more is not considered accredited. But there is lots of talk that the SEC might raise that to $1.5 million or $2 million. I'm not sure this would do much. Investors of all stripes can still get into these funds via funds of funds. The real issue is what proportion of one's net worth is being invested. My sense is that the individuals that are directly investing in these funds have way in excess of $1.5 million anyway. We'll see where this goes.

For more:
- here's an Investment Dealers' Digest article (For FierceFinance readers)