Wednesday, 29 March 2017
Last updated 19 min ago
Apr 9 2012 | 11:16am ET
An 80-year-old rule that has prevented the hedge fund industry from advertising to the public became history on Thursday, when President Barack Obama signed a wide-ranging jobs-creation bill that also abolished the longstanding ban.
The JOBS Act seeks to do many things to help start-up companies. But it also eliminates a provision in Depression-era securities law that bans marketing of privately-issued securities.
Hedge funds' new ability to market themselves is expected to be finalized by the Securities and Exchange Commission in about three months.
The JOBS Act does not, however, make hedge funds available to the general public. The new law does not alter the definition of "accredited investor," meaning that only those with $1 million in net worth will be able to put their money with hedge funds.
"This is an action whose time has come," Hedge Fund Association President Mitch Ackles said. "Now that many hedge fund managers are required to register with the SEC, the strongest reason for the ban on hedge fund advertising has been removed."