Wednesday, 10 February 2016
Last updated 6 hours ago
Mar 29 2012 | 11:58am ET
Very quietly, the 80-year-old ban on marketing hedge funds may be on its last legs.
The JOBS Act, which President Barack Obama has suggested he would sign if it is passed, would eliminate the prohibition on the marketing of private placements, including hedge funds and private equity funds. That rule, part of the Securities Act of 1933, has prevented hedge funds from advertising and is often cited by alternative investments pros for their refusal to speak with the press.
The bill would not open hedge funds up to non-accredited investors, or those with less than $1 million in net worth.
The JOBS—Jumpstart Our Business Startups—Act has already been passed by both houses of Congress; it awaits a second vote in the House of Representatives after the Senate amended the original measure passed by the House. Approval and the president's signature are expected by next month.
In addition to the hedge fund marketing provision, the bill would ease a host of regulatory requirements.
If the bill becomes law, it could preempt the final bid by Bulldog Investors' Philip Goldstein to have it invalidated by the courts. Goldstein's tiff with Massachusetts regulators is currently on appeal to the U.S. Supreme Court.
Massachusetts in 2007 fined Bulldog for offering information about itself through its web site.