A recent court decision curbs the government’s attempts to regulate hedge funds and also relieves family offices from the threat of extra scrutiny. Last week, a federal appeals court rejected a rule that went into effect in February requiring hedge funds to register with the Securities and Exchange Commission.

The rule required hedge funds with 15 or more investors and more than $25 million in assets under management to file detailed disclosure statements. This affected not only hedge funds, but multifamily offices, which could have avoided registering by advising fewer than 15 clients. The new provision, however, changed the definition of a client by counting each shareholder, limited partner or beneficiary of a private fund. Since family members frequently oversee their family offices, these new rules raised privacy worries in the event that providing investment advice or choosing outside advisors could require registering with the SEC.

For now, this lifts family office concerns, barring a successful SEC appeal or rule revision.

The SEC will evaluate the court’s decision and develop alternatives, according to a statement from chairman Christopher Cox released June 23. The court decision, “requires that going forward we reevaluate the agency’s approach to hedge fund activity,” he said.