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Currently, the proposed legislation to restructure the U.S. financial regulatory system is making its way through both houses of Congress. The plan is aimed to require stability, safety and systemic risk to play a larger role in the planning, thinking and strategizing of every financial institution going forward. President Barack Obama is about to reveal details of the plan that will directly and indirectly impact the hedge fund industry. Based on Wall Street Journal report, hedge funds most likely will be forced to register under the president’s plan. Obama’s proposal would give the Federal Reserve greater oversight powers, and give the government the power to unwind systematically-important financial institutions, including, potentially, hedge funds. The plan is somewhat less sweeping that some expected:  It does not replace the U.S.’s several regulatory agencies with a single, overarching regulator. The Securities and Exchange Commission and Commodity Futures Trading Commission would not be merged, as some expected.   Indeed, Obama’s proposal would eliminate just one regulator, the Office of Thrift Supervision, but would add one, overseeing consumer-oriented financial products. It would also create a council of regulators that would monitor systemic risk. According to the Wall Street Journal report, stronger and more wide-reaching powers for the Fed are the centerpiece of the plan. The central bank would be able to set capital and liquidity requirements for the largest financial firms, including hedge funds, as well as force such firms to disclose their books. The proposals won’t just impact hedge funds directly. They also could revolutionize the world in which hedge funds operate. Leverage limits could affect large bank’s prime brokerage business and their willingness to offer leverage to hedge funds. It will seek to remake how mortgages are underwritten, as well as requiring greater transparency for the derivatives traded by many hedge funds.