Article: Hedge Fund Developments In 2006.(Investment Advisers Act of 1940)

1. Introduction

There have been a number of significant international developments since last year including the publication in July, 2006 of the Report of the Alternative Investment Expert Group (the "Expert Group's Report") under the auspices of the European Commission as envisaged by its Green Paper on the Enhancement of the EU framework for Investment Funds published in July, 2005, the decision of a U.S. federal appeals court to strike down the SEC's Rule 203(b)(3)-1(d) containing the "hedge fund amendments" to the Investment Advisors Act, 1940, and recent market data released showing the state of health of the hedge fund industry as a whole.

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