Registration, reporting and post-trade processing head list of spending areas.

By any yardstick, regulations are having an impact on hedge funds, whether it’s new registration requirements, reporting, or middle- and back-office burdens.

New reporting requirements for hedge funds, especially Form PF, will tax the resources of fund managers and service providers alike.

The regulatory framework under the Dodd-Frank Act establishes the need to look at data holistically and to aggregate data from multiple sources.

Form PF requires hedge funds to consolidate information that may be spread across multiple fund administrators.

Hedge funds with more than $150 million in U.S. assets under management must register with the SEC. Managers with assets between $100 million and $150 million who advise separately-managed accounts must also register.

Once registered, hedge fund managers by law must implement a program toe ensure compliance with the Investment Advisers Act.

“They will need to appoint a chief compliance officer, and that individual will have responsibility for creating a policy and procedures document,” John Schneider, partner in the investment management regulatory practice at KPMG, told Markets Media.

For many years, advisers to private funds have been able to avoid registering with the Commission because of an exemption that applies to advisers with fewer than 15 clients, an exemption that counted each fund as a client, as opposed to each investor in a fund.

As a result, some advisers to hedge funds and other private funds have remained outside of the Commission’s regulatory oversight.

Title IV of the Dodd-Frank Act eliminated this private adviser exemption. Consequently, many previously unregistered advisers, particularly those to hedge funds and private equity funds, will have to register with the SEC and be subject to its regulatory oversight, rules and examination.

In addition, the SEC has added amendments to the adviser registration form to improve its regulatory program. These amendments require all registered advisers to provide information about the types of clients they advise, their employees, and their advisory activities.

SEC-registered investment advisers with at least $150 million in private fund assets under management will also be required to periodically file a new reporting form (Form PF).

According to a survey conducted by Omgeo, a provider of post-trade services, 92% of firms will make operational changes in the next year to 18 months, with new regulations as the primary driver.

More than a third of firms will be focused on improving reporting and transparency (35%), while the execution and clearing of formerly bilateral OTC derivatives, collateral and margin management, and overall trade processing each were cited by 13.5% of respondents.

“Post-trade is an area that many hedge fund managers haven’t had to worry about in the past, as they’ve been able to get by on spreadsheets or by leveraging their prime broker’s tools,” Matt Nelson, executive director of strategy at Omgeo, told Markets Media.

“As hedge funds continue to expand into new asset classes and markets, in addition to brining on multiple prime brokers, the business has simply become too complex to manage with a spreadsheet,” said Nelson.

Nearly half of those surveyed (48%) said their main concern with new regulations is that they will increase the overall costs of doing business.

This was followed by the challenge of managing risk across business operations (27%) and preparing for the additional complexities in post-trade processing caused by new regulations (21%).