SEC To Vote On Hedge Fund Advertising Rules

Jul 5 2013 | 9:43am ET

The Securities and Exchange Commission is set to end an 80-year-old ban on hedge fund advertising next week.

The regulator will vote on a much-delayed proposal to allow solicitation for private offerings, including hedge funds, on Wednesday. It is all but certain to be approved, with the support of Chairman Mary Schapiro, the SEC's two Republican members and possibly a second Democratic vote.

The new rule was mandated by last year's JOBS Act, which gave the SEC a deadline of last July. But the rule was not even introduced until August, and was then further delayed by former Chairman Mary Schapiro.

In April, White made plans to push through a rule that included no investor protections. The proposal that goes to a vote next week includes some, notably restrictions on sales literature, new filing requirements and a ban on convicted felons and other "bad actors" from participation in offerings, but not the more stringent provisions sought by investor advocates.

The SEC will separately consider those measures after approving the advertising rule.

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