(Bloomberg News) The U.S. Securities and Exchange Commission will require private-fund advisors to register with the agency, opening hedge funds and private-equity funds to unprecedented scrutiny.

SEC commissioners voted 3-2 yesterday to approve a Dodd-Frank Act measure calling for about 750 advisors to disclose "census-like data" about their investors and employees, the assets they manage, potential conflicts of interest and their activities outside of fund advising. The advisors must register by March 30, and all of the information they disclose will be public.

"Many of these private fund advisors will now not only register with the commission, but be subject to its rules, its regulatory oversight and its examination program," SEC Chairman Mary Schapiro said before the vote in Washington. "Today's rules will fill a key gap in the regulatory landscape."

The registration system exempts as many as 2,000 venture capital fund advisors, foreign advisors without a U.S. business and advisors with less than $150 million in assets under management. Those exempted are still obliged to file a portion of the information required of the registered advisors.

The SEC is seeking data "that would aid investors and assist our regulatory and examination efforts without requiring any disclosure that could inadvertently harm the interests of private fund investors," Schapiro said.

Private-fund registration was included in the Dodd-Frank Act after hedge funds pushed for the requirement, which was seen as less burdensome than the regulations being imposed on banks. In lobbying Congress, representatives of the private pools of capital argued that they shouldn't be heavily regulated because they didn't cause the financial crisis.

'Greater Clarity'

"We are optimistic that the commission's actions today will provide greater clarity and sufficient time for our members as they work to fully comply with these rules," said Richard Baker, president and chief executive officer of Washington-based lobbying group Managed Funds Association, in a statement.

Many of the largest hedge-fund firms are already SEC-registered, including Paulson & Co. Inc., Renaissance Technologies LLC, Bridgewater Associates LP and AQR Capital Management LLC.

Commissioner Kathleen Casey, who joined fellow Republican Troy Paredes in opposing the registration rule, said it will harm innovation and capital formation while giving "no meaningful relief" to advisors who qualify for an exemption.

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