The Hedge Fund Association, an international hedge fund lobby group, has written to the SEC in support of the advertising and solicitation rules in the recently passed JOBS Act. The letter comes a week after a mutual funds industry lobby wrote to ask the watchdog to continue to restrict hedge fund advertising. Hedge Funds Ask SEC To Give Clarity On JOBS Act Loosening regulations on small businesses that wish to raise capital, including through crowdfunding, while retaining investor protections.
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Under the new rules, hedge funds will still be restricted to selling their securities to accredited investors. Heller asked the watchdog to provide clearer rules to verify that investors are accredited to “add further stability to the industry.”
Hedge funds have been banned from soliciting or advertising their private offerings to the general public in exchange for being exempt from having to register their interests or shares with the SEC under Rule 506 of Regulation D. The HFA says the lack of a clear definition of a solicitation has “created confusion about what hedge fund managers can disclose in their marketing materials, at conferences or in the media.”
