Chairman Says SEC Can't Make Hedge Fund Advertising Deadline

Jun 28 2012 | 3:31am ET

Hedge funds will have to wait a little longer to begin peddling their wares like most other companies.

In April, Congress passed and President Barack Obama signed the JOBS Act. Among that law's many provisions was the elimination of an 80-year-old rule that had prevented hedge funds from advertising.

But while the law gave the Securities and Exchange Commission 90 days to write new rules to implement that provision, the regulator will miss the deadline, SEC Chairman Mary Schapiro will say tomorrow.

Schapiro will tell a House of Representatives panel that the timelines enshrined in the law "are not achievable."

"The 90-day deadline does not provide a realistic timeframe for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the commission, and an opportunity for public input," Schapiro said in prepared testimony.

Schapiro did say that the SEC has "made significant progress" on the new rule, adding that she thinks the regulator "will be in a position to act on a staff proposal in the very near future."

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