HFA Wants Clear Investor Accreditation Rules

Sep 13 2012 | 7:46am ET

The Hedge Fund Association wants the Securities and Exchange Commission to spell out its rules for investor verification for funds planning to advertise once an 80-year-old ban on the practice is lifted.

The recently passed Jump Start Our Business Start-ups Act proposed lifting the ban on hedge fund advertising while continuing to restrict investment to accredited investors.

The HFA welcomes the move to lift the ban but worries that regulations that are either too vague—the SEC has said managers must take ‘reasonable steps’ to ensure investors qualify— or too detailed could derail the JOBS Act’s original goal of increasing employment by making it simpler for private companies to raise money from investors.

“At the same time as lack of legal clarity can cripple businesses with uncertainty, clear laws which demand too much of investors and issuers can dampen the interest in allocating capital to private companies while greatly adding to fund managers’ operating expenses,” said HFA President Mitch Ackles. “In drafting final regulations, we ask the SEC to keep this in mind and to remember the original intent behind JOBS Act—to invigorate the economy.”
 
In a letter to the SEC, the HFA suggested accrediting would “ideally” involve an investor signing a subscription agreement affirming that he or she is an accredited investor and providing “a detailed description of the reason why the investor made that claim.”

The group also asked the SEC to coordinate with another regulatory body, the Commodity Futures Trading Commission, in drafting its investor accreditation rules.


In Depth

Q&A: Pantheon’s McCrary Says Private Equity Market ‘Robust’

Dec 17 2014 | 8:32am ET

Dennis McCrary is a partner at Pantheon, a private equity firm with $32.2 billion...

Lifestyle

Cohen Donates $1.5M To GOP Governors Association

Dec 10 2014 | 7:13am ET

The Republican Governors Association raised close to $25 million from October 1...

Guest Contributor

Q&A With Daniel Gallancy: Institutional Interest In Bitcoin Is Growing Steadily

Dec 12 2014 | 7:54am ET

Daniel Gallancy is founder and CEO of SolidX, a provider of total return swaps for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.