Securities attorney Howard Groedel of Ulmer & Berne LLP, comments on the CFTC’s easing of hedge fund advertising restrictions…
The recent harmonisation of CFTC and SEC rules permitting general solicitation and advertising, while a sensible step, is unlikely to herald in a significant increase in the number of hedge fund advertisements.
Many of the hedge funds subject to CFTC regulation engage in specialised or esoteric trading strategies. The more critical issue for the managers of these funds is finding enough investments to make rather than raising more capital. Many of these funds are at full capacity and don’t need to advertise in order to raise more capital.
