Last week on July 21, 2010 President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act – the so called “banking reform bill.”

The bill is tens of thousands of pages long and contains mountains of new regulations for the financial industry from everywhere to banks, private equity funds, and even stock brokers. The way many of the regulations will be enforced will be up to regulators so it isn’t completely clear how many aspects of the bill will play out.

However, it is clear that the bill will have an impact on high net-worth individuals who invest in private placements and public offerings, and will bring regulation to many hedge funds.

To invest in such vehicles one has to be classified as an “accredited investor” – that means having a net worth over one million dollars. With the last real estate boom many investors rose into that category thanks to the rising value of their homes.

Now the Dodd-Frank bill is going to exclude the value of a person’s primary home from the net worth calculation. This will make a lot of Americans fall down out of the accredited investor category.

If you make $200,000 in annual income or with a spouse jointly make $300,000 then you will still be considered an accredited investor.

When it comes to hedge funds the bill also will put tighter requirements on the part of banks that offer them margin and leverage. It will also force hedge funds that have assets greater than $150 million dollars to register with the Securities and Exchange Commission as a registered investment advisor.