For a while, it looked like hedge funds would escape the regulatory reform push relatively unscathed. That still rings true. The exception might be small hedge funds, many of which will be facing registration requirements for the first time.

According to Dodd-Frank, hedge funds with assets in excess of $150 million will be faced with a slew of new regulations, such as communications archiving and record-keeping, disclosure of details about auditors and third-party servicers, and compliance in general, according to the New York Times.

We've noted before that many large hedge funds have voluntarily registered with the SEC, even though there wasn't a formal mandate before Dodd-Frank. In addition, many have been investing for two years now in better compliance processes and hiring more third-party administrators to help with various compliance-related tasks, especially in the back office.

That is not so with small hedge funds. And they will likely have a tougher time, just as nonaccelerated filers had the most trouble complying with Sarbanes-Oxley, especially Section 404(b). Recall that these companies eventually won a reprieve on 404(b), which was granted coincidentally via Dodd-Frank.

Will there be a reprieve on hedge fund regulation? You never know. In any case, the SEC has its hands full, and small fund oversight may not rank high on its list of priorities.

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