The Securities and Exchange Commission is taking heat for a
proposed rule that would allow issuers of private securities, such as hedge
funds, to advertise their offerings and solicit the public.
The agency last week voted to put the proposal out for
comment. The controversial rule change
is mandated under the Jumpstart Our Business Startups Act. Once enacted, the
revised rule will affect private securities that are exempt from registration
under SEC Rule 506 of Regulation D and sold only to accredited investors.
The Investment Company Institute, whose mutual fund members
worry about competition from hedge funds, blasted the proposal immediately.
”We are keenly
disappointed ... that the commission apparently has not included ... investor
protection measures in the proposal, beyond those few specifically mandated by
the JOBS Act,” ICI chief executive Paul Schott Stevens said…
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