William Donaldson, the SEC's Republican chairman at the time the rule was drawn up in October 2004, says the deadline is necessary to improve the transparency of the traditionally secretive industry that controls assets worth $1,200 billion.
He pointed to 51 SEC fraud-related investigations into hedge fund managers between 1999 and 2004.
However, more than 1,000 hedge funds have already registered with the SEC and from Wednesday another 1,000 or so will have to register.
Hedge fund managers based in the UK and Hong Kong are the most scrupulous overseas players â of the 113 overseas-based hedge fund managers that have registered with the SEC, 68 are located in the UK and seven are in Hong Kong.
Yet in London hedge fund managers regard the SEC as unnecessary as the Financial Services Authority (FSA) regulates the industry.
"Outside the US, the feeling is that the FSA is completely on top of hedge funds, far more than anyone else in the world," Philippe Bonnefoy, partner at Cedar Partners, a London-based fund that invests in hedge funds, told the Financial Times.
But some hedge fund managers are trying to avoid regulation by exploiting a loophole whereby they do not have to register with the SEC if they do not accept additional money from existing clients or accept contributions from new investors from February 1st.