There are three and half bills in Congress for regulating private investment funds. The Hedge Fund Adviser Registration Act of 2009, the Hedge Fund Transparency Act of 2009 and the Private Fund Transparency Act of 2009 are all sitting in committee. The half is the proposal from the Obama administration: Private Fund Investment Advisers Registration Act of 2009. The Obama bill has not yet been submitted.
The National Venture Capital Association has been lobbying hard (or at least effectively) to get some changes in the bill before it is submitted. There is now new language in the bill that reads:
(l) EXEMPTION OF AND REPORTING BY VENTURE CAPITAL FUND ADVISERS.—The Commission shall identify and define the term ‘venture capital fund’ and shall provide an adviser to such a fund an exemption from the registration requirements under this section. The Commission shall require such advisers to maintain such records and provide to the Commission such annual or other reports as the Commission determines necessary or appropriate in the public interest or for the protection of investors.
Of course that still defers the very difficult task of defining a “venture capital fund” from the various types of private investment funds.
In a statement from Mark G. Heesen, president of the National Venture Capital Association:
“This proposal recognizes that venture capital firms do not pose systemic financial risk and that requiring them to register under the Advisers Act would place an undue burden on the venture industry and the entrepreneurial community. The venture capital industry supports a level of transparency which gives policy makers ongoing comfort in assessing risk.”
References:
- Private Fund Investment Advisers Registration Act of 2009 – previous post
- NVCA Is Happier With Congress from peHUB
- NVCA Applauds Venture Capital Exemption Language in Draft of Investment Advisers Act
– NVCA press release 
NVCA Applauds Venture Capital Exemption Language in Draft of Investment Advisers Act