SEC Will Miss Deadline for Fund Advertising Rules

June 27, 2012 § 4 Comments

According to anticipated testimony by SEC Chairman Mary Schapiro, the SEC will miss the deadline to adopt rules that would lift the ban on advertising and general solicitation by hedge funds and other private pooled investment vehicles.

The JOBS Act directed the SEC to adopt rules within 90 days from enactment–July 5. Schapiro indicated 90 days was not a reasonable timeframe. Given the SEC’s pace of rulemaking under Dodd-Frank mandates and previous comments from SEC commissioners, Schapiro’s remarks are not surprising.

According to Schapiro, the SEC should “be in a position to act on a staff proposal in the very near future.” No word yet on what that proposal will look like or whether it will impose other requirements on private fund issuers who want to advertise in connection with their offerings. Comments submitted to the SEC have suggested that new rules should raise the threshold for accredited investor qualifications, require copies of advertising to be filed with the SEC, or prohibit performance claims in advertising materials.



Jack G. Martel is the author of Investment Adviser Law Blog which is devoted to providing information and discussion of interest to investment advisers, private fund managers and others in the financial management industry. Jack is a partner in Ragghianti | Freitas LLP. He has over fifteen years experience in general business and securities transactions with a focus on assisting investment advisers, fund sponsors and managers in all manner of legal, regulatory and compliance issues. Jack can be reached at 415.453.9433.


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