Recall that the Securities and Exchange Commission failed pretty spectacularly in its initial attempt to require hedge fund registration. The question now is what to do next. Punt? Most likely, it will still seek some form of oversight. Which has all eyes on the agency. So far, it has yet to tip its hand. Possible courses: Alter the reporting requirements or perhaps change the net wealth requirements for hedge fund investors, something that Chairman Chris Cox has suggested he will consider. Keep in mind that at least one commissioner opposes regulation. The wildcard in all this is Congress. True, it is distracted right now. But it has demonstrated a lot of concern in this area and legislation may bubble forth.  

For more on this:
- Here's an Investment Dealers' Digest article (For FierceFinance readers)