MFA Blog

MFA Statement on JOBS Act Rules

Posted on July 10, 2013

Earlier today, the Securities and Exchange Commission (SEC) approved new rules related to the Jumpstart Our Business Startups (JOBS) Act, allowing hedge funds to advertise their funds to qualified investors.  The lifting of the ban on general solicitation is something that MFA has long sought, and in response to this rule and the others that were approved by the SEC, MFA issued this statement:


WASHINGTON, D.C. – Managed Funds Association released the following statement from General Counsel Stuart Kaswell regarding the three actions taken by the SEC today:

MFA commends the SEC for continuing the implementation of the JOBS Act.  MFA is hopeful that the steps the SEC has taken today will help modernize existing securities laws to enhance market transparency, improve capital formation, and strengthen investor protection.

MFA supports the elimination of the prohibition on general solicitation for Regulation D offerings in a manner that will allow issuers to engage in general solicitation and take appropriate steps to verify that the purchasers of securities are accredited investors.  Even before Congress enacted the JOBS Act, MFA supported eliminating obsolete restrictions on private fund communications while preserving the restrictions on who may invest in a hedge fund.  We look forward to reviewing the text of the final rules. We also urge the CFTC to harmonize its regulations with the JOBS Act in order to allow for commodity pool operators of privately-offered pools to operate under the new SEC rule.

The Commission’s proposal to amend Regulation D, Form D and Rule 156 under the Securities Act raises complex legal issues.  We will be particularly interested to examine the proposal given that broad anti-fraud restrictions currently exist for private fund sales literature.  MFA will be reviewing the text of this proposal when it becomes available.

Finally, MFA looks forward to reviewing the adopting release regarding bad actors.  MFA is strongly supportive of a ban on bad actors from engaging in certain private offerings.  We are hopeful the rule follows closely the legislative intent of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

We look forward to continuing to work with the SEC in a constructive manner on all of these developments.


For more information on hedge funds and the JOBS Act, visit MFA’s resource page here.