Hedge fund registration and regulation would have the biggest effect on smaller funds, those with $40 million or less in assets, according to Jedd Wider, an attorney with the New York-based firm of Orrick, Herrington & Sutcliffe. Wider said the smaller hedge funds tend to aim at the lower end of the market. "If you increase the threshold by 50 percent for qualified investors, then it could rise from $750,000 net worth to $1.5 million," Wider said. "For a small fund, geared only toward high net-worth investors, this could be hard." The SEC is said to be debating a measure that would require hedge fund managers to register as investment advisers. However, Federal Reserve Board Chairman Alan Greenspan has defended the role of hedge funds in providing liquidity.