Hedge Fund Marketing Ban Erased With Stroke Of Obama's Pen

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."


In Depth

Q&A: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 

From the current issue of