An 80-year-old ban on hedge fund advertising will finally be lifted this summer, according to U.S. Securities and Exchange Commission Chairman Mary Schapiro.
Hedge funds, Mr. Goldstein argues, should be treated more like pharmaceutical companies, which are allowed to promote drugs even if consumers must secure a doctor’s prescription to buy them.
Most hedge fund Web sites offer only limited information, and investments throughout the estimated $1.9 trillion industry are often made through a process that begins by word-of-mouth.
The Managed Funds Association, a trade group that represents about 1,600 industry members, has long supported a loosening of the policy. “We look at it as a transparency issue,” the association’s senior legal counsel, Benjamin Allensworth, said. “One of the big reasons hedge funds don’t talk about themselves is this prohibition on general solicitation.”
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