The $850bn hedge fund industry is preparing to fight the Securities and Exchange Commission and its decision to force all funds to register with the US regulator.

The vote to clampdown on the largely unregulated industry was passed by a narrow 3-2 margin on Wednesday at the SEC's headquarters in Washington. It came despite widespread opposition from hedge fund managers, many of whom claim registration is unnecessary and unwelcome, and that it will add to administration costs and force them to give up proprietary information.