Wednesday, 14 May 2008 08:00
Hedge fund managers have began lobbying the SEC to relax restrictions that prohibit advertising or marketing aimed at soliciting new clients. Managers claim that they should be able to share basic information with potential clients to ensure these clients can properly and efficiently choose a manager best suited for their fiscal goals. Hedge fund managers contend that this basic information should include how their funds are performing, how they make money, and who they employ on their websites. According to Philip Goldstein, founder of Bulldog Investors and one of the leading proponents to relax the advertising restrictions, “it is absurd to treat this (information) as classified information.”
Acting on behalf of the hedge fund industry, Managed Funds Association asked the SEC to loosen advertising restrictions in a seven-page letter addressed to SEC Chairman Christopher Cox. The SEC has yet to respond, and the possibility of advertising restrictions being relaxed is slim according to industry experts. In all likelihood, according to Philip Goldstein, (the) matter will have to be resolved in court.