The SEC has been making noises in recent days to reassure hedge funds that had dutifully registered with the commission that they are on safe ground, even after courts struck down the SEC's hedge fund rule back in June. Funds managing above a certain level of assets were required to have registed back in February. Many had already done so voluntarily, and some have even continued to register after the reg was struck down. More from Reuters:

Hedge fund managers and their lawyers welcomed the SEC's emergency guidance, issued late on Thursday, saying it will go a long way toward clearing up confusion left by the court's decision and Monday's news that the SEC will not appeal.

"This is a very helpful letter because it restores protective provisions of the rule," said Elizabeth Fries, a partner at Boston law firm Goodwin Procter.

The SEC's hedge fund order was adopted by the investor protection agency in 2004. It took effect in February, requiring most hedge fund advisers to give the SEC basic information about themselves and submit to examinations...

...In its new guidance, the SEC told the registered advisers that the agency will not initiate enforcement actions against them if they obey the provisions in the invalidated rule.

For example, the rule said funds-of-funds had a more-generous 180 days to send audited financial statements to investors. As long as the advisers remain registered, they will still have roughly half a year to deliver those documents, according to the guidance.

This may be especially important for funds-of-funds, which put together portfolios of individual hedge funds for their clients and likely need additional time to collect the data from their hedge fund managers.

"This guidance makes it clear that it won't hurt those funds that have registered," Fries said.

Also, as long as they stay registered, funds will not be penalized for having kept performance data only since February, 2005, the guidance said. Funds that are not registered have to show much longer data histories."

Read the full article here.

-- MDT