The global financial crisis triggered the in-depth discussion of strengthening regulation on private funds including hedge fund. IOSCO announced six regulation principles on hedge fund this June, and the EU also prepared AIFM Directive. UK and US are also pursuing to strengthen regulations on private funds. As to domestic private funds, there was no particular problem with regard to the financial turmoil. On the other hand, there are some criticisms that the regulations on the domestic private funds (and fund managers) are excessive compared to those of other countries and cause several side-effects such as adverse discrimination against domestic funds, obstacles to the development of private fund industry, and the difficulties for financial innovation. The problems about the regulation of private funds in Korea may be summarized as follows : First, the rules and regulations on private fund are not systematic and unified. Second, the FSMA regulation on private funds does not properly consider the characters of private funds, and it rather favors the regulators in enforcing laws and regulations. The FSMA classifies private funds into five types and applies different level of regulation to each of them. However, such regulatory approach is not reasonable and, rather, confuses industry and capital market. Third, the overall regulatory level for the domestic private funds is stricter than that of the advanced markets such as the UK and the US. Severe domestic regulations can adversely discriminate against the private funds and does not meet the global standard either. The better regulatory approach toward private funds can be as followed; First, the domestic laws and regulations on private funds should be integrated into the FSMA in order to apply the same level of regulation to the same economic entities. Second, it is necessary for the FSMA to put the private fund regulations altogether in the separate chapter and to use unified concept for private fund. Third, it is also necessary to improve domestic regulations to meet global standard by carefully studying the global regulatory trends. This effort is also needed for avoiding adverse discrimination against the domestic private funds.