Bailey McCann, Opalesque New York: In a comment letter submitted to the Securities and Exchange Commission (SEC) today, the Hedge Fund Association reiterated its support for provisions of the Jumpstart Our Business Startups (JOBS) Act that will let hedge funds solicit potential investors. The letter also called for clearer rules to verify that potential investors are indeed accredited as a way to "add further stability to the industry."
Under new JOBS Act rules, hedge funds would still be restricted to selling their securities to accredited investors such as individuals with a minimum $1 million net worth and qualified institutional investors however, they would be able to communicate more directly with these investors than they have in the past. Richard Heller, chairman of the HFA’s Regulatory and Government Advisory Board, wrote the letter for the HFA, and sought to assuage concerns that the new rules might weaken existing anti-fraud rules.
"Providing rules to strengthen a manager's decision to accept a subscriber's investment by following the rules to be drafted by the SEC that will for the first time provide a road map for managers to rely upon will, we believe, add further levels of compliance that the Dodd-Frank Act initiated," the letter said.
The SEC is expected to release formal rules and guidance about what they deem as acceptable solicitation on July 5 of this ye......................
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