HFMWeek Quotes Jason Daniel on SEC Repeal of Hedge Fund Ad Ban

Jason Daniel, senior counsel in Akin Gump’s investment management practice, was quoted by HFMWeek in an article on the Securities and Exchange Commission’s decision, as part of the JOBS Act, to lift a ban on advertising by hedge funds.

Regarding an SEC statement that a higher required minimum investment could reduce or eliminate the steps to verify an accredited investor, Daniel noted, “I liked the language the SEC repeated from the proposed release but [raising the minimum] is not one of the specified methods of satisfying the requirements. You would have a good basis to take fewer steps but you’re not necessarily completely out of the woods.”

Proposed amendments to Regulation D and Form D—including amending Rule 503 of Regulation D to require the filing of a Form D (currently an optional form) “no later than 15 calendar days in advance of the first use of general solicitation in a Rule 50-6(c) offering and the filing of a closing Form D amendment within 30 calendar days”—split the five commissioners three-to-two in favor.  The article reports that the Republican commissioners voted against the proposals because they “subject[ed] private offerings to new regulatory burdens.” Regarding these amendments, Daniel said, “Pre-filings of general solicitation material are one thing that may make managers decide not to use general solicitation. A lot of managers will be so concerned with the risks associated with making those filings, and who gets the information that they may decide to avoid it altogether.”