Comment Letter on FINRA Rule 5131, New Issue Allocations and Distributions

On August 19, MFA submitted a comment letter to FINRA on Rule 5131, New Issue Allocations and Distributions. In the letter, we explain that the structure and operation of hedge funds significantly reduce the risk of spinning activity by a hedge fund investor through an investment in a hedge fund. The letter also explains that the Rule could be interpreted to require hedge fund managers to comply with the Rule in a manner that would not be practicable for many managers, and recommends that FINRA issue guidance to permit a hedge fund to better rely on the de minimis exemption from the anti-spinning provision.

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