Hedge fund marketing overview

Abstract

Purpose

To provide a brief overview of US securities laws that apply to the marketing of hedge funds.

Design/methodology/approach

Summarizes US securities offering rules, including Regulation S and Regulation D at the federal level, state securities laws, antifraud standards, and broker‐dealer regulation.

Findings

All securities offered and sold in the USA must be registered with the SEC unless an exemption is available under the Securities Act. Offerings offshore under Regulation S and private placements in the USA under Regulation D offer two such exemptions. Most states have private placement exemptions similar to Regulation D. While certain state‐level regulation over the registration of securities has been preempted by federal law, a level of state regulation continues to exist. All US offers and sales of securities are subject to general antifraud standards under both US federal and state laws. Funds and their employees, investment managers and their employees, and any placement agents may not contact any US investor in the USA or any non‐US investor from the USA without registering as broker‐dealers.

Originality/value

Provides a concise overview of laws and regulations that apply to the marketing of hedge funds.

Citation

Johnson, E.W. (2006), "Hedge fund marketing overview", Journal of Investment Compliance, Vol. 7 No. 2, pp. 48-51. https://doi.org/10.1108/15285810610711536