BOSTON (TheStreet) -- Reports that hedge fund kingpin George Soros plans to return $1 billion of his $25 billion fund to investors to avoid having to register with the Securities and Exchange Commission surprised Wall Street, but the news is unlikely to start a trend.

New regulations under the Dodd-Frank Act will require hedge funds with over $150 million in assets to register with the SEC by March 2012, a change that will give the government a peak into the secretive world of hedge fund managers.

George Soros

But under the regulation, hedge funds advisers of any size that register as "family office" organizations, that is those that manage the wealth of one particular family, are exempt from the registration.

Hedge fund securities law specialist Michael Minces, of the New York law firm

Allan J.P. Rooney

, said "the majority of hedge funds are in the business of managing third-party money, so that is not an option for them."

He said there are a few large, high-profile hedge funds that evolved from managing family wealth into serving as a major money manager of others money, with Soros as the most prominent example. But that's not typical for the industry, so the new Dodd-Frank regulations are not likely to result in sweeping changes for the hedge fund industry.

"The example of George Soros that you see in press may make you think it is an option for many investment advisers, but it's not," Minces said. "It's just that Soros happened to make his money in this industry" after building his family wealth first and then taking on more "outside" money to manage.

"I don't see this as something that is going to be prevalent in the industry," said Martin Lax, a partner in the alternative investments and brokerages group at the New York accounting firm, McGladrey.

Lax said the definition of "family office" limits the investors to the extended family, which precludes third party investors. "So I can't see the younger, more aggressive fund managers saying: 'I'm going to excluded 80% or 90% of my potential investors to avoid registration. "It will be a very select group of people."

A hedge fund industry expert, speaking on background, also said that the Dodd-Frank regulations aren't likely to result in a significant shift for the industry because about 50% of hedge funds are already registered with the SEC so that they can attract highly-regulated institutional money such as pension funds. About 60% of the hedge fund industry's assets are institutional assets, so they won't be eligible for the "family office" exemption.

The new rules would also require hedge funds to maintain extensive records about their investments and marketing practices, hire a chief compliance officer and they would be subject to periodic SEC examinations.

Soros, who is best known as the man who "broke the bank" of England by betting against the British pound, a move that earned $1 billion for his Quantum hedge fund in 1992, said in a letter to his investors that he has chosen to operate his Soros Fund as a family office and thus be exempt from the SEC reporting requirements, according to a report in Bloomberg News report.

Last year, Stanley Druckemiller who had been Soros's chief strategist for 12 years until 2000, closed his money-management firm, Duquesne Capital Management and created his own family office, which would allow him to avoid SEC oversight.

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