Opalesque Industry Update - The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has expressed support for the elimination of the ban on general solicitation and advertising by hedge fund managers in the US, but has said that only accredited investors should continue to be allowed to invest in hedge funds. |
In its response to the US Securities and Exchange Commission (SEC) ahead of the SEC’s implementation of the JOBS (Jumpstart Our Business Startups) Act, AIMA said it supported the legislation’s purpose of improving access to capital and enhancing economic growth by reducing unnecessary regulatory burdens.
In particular, AIMA said it strongly supports the elimination of the prohibition on general solicitation and advertising for issuers raising capital from accredited investors, as long as all buyers are accredited investors. SEC rules should require the issuer to take reasonable steps to verify that purchasers of the securities are accredited investors.
AIMA CEO Andrew Baker said: “With the advent of greater regulation, transparency and oversight of the hedge fund industry, we believe that the time has come to bring the general solicitation and advertising regulations in the US more in line with what we see as more flexible marketing and advertising regimes adopted elsewhere in the world.
“But while the time may be right for these restrictions to be lifted, we strongly support the requirement that only accredited investors be allowed to invest in hedge funds engaged in broad marketing and advertising efforts. We are hopeful that the SEC will propose rules to implement this provision to achieve the capital-raising goals that the US Congress established.”
AIMA also expressed its support for the positions on the JOBS Act articulated by the Managed Funds Association (MFA) in its submissions to the SEC.
To download AIMA’s response to the Securities and Exchange Commission regarding the JOBS Act, click here: www.aima.org/objects_store/aima_response_sec_jobs_act_31052012_-_submitted_150612.pdf