Monday 26th January 2015
FRIDAY, JANUARY 23RD 2015: European markets regulator ESMA has added Athens Exchange Clearing House to its list of authorised CCPs under the European Market Infrastructure Regulation (EMIR). EMIR requires EU-based CCPs to be authorised and non-EU CCPs to be recognised in the European Union (EU). The updated list of authorised CCPs is available on ESMA's website - Driven by strengthening private domestic demand, economic growth in the US is expected to accelerate modestly this year and drag last year’s unspectacular housing activity upward, according to Fannie Mae’s Economic & Strategic Research (ESR) Group. Amid continued low gasoline prices, a firming labour market conditions, rising household net worth, improving consumer and business confidence, and reduced fiscal headwinds, the economy is expected to climb to 3.1% in 2015, up from the Group’s estimate of 2.7% in the prior forecast. The stronger economic backdrop should lead to improving income prospects, underpinning a higher rate of household formation in 2015. "Our theme for the year, Economy Drags Housing Upward, implies that both housing and the economy will pick up some speed in 2015, but that the economy will grow at a faster pace," says Fannie Mae chief economist Doug Duncan. "We have revised upward our full-year economic growth forecast to 3.1% for 2015, which is not yet robust but still an improvement over last year’s growth. Consumer spending should continue to strengthen due in large part to lower gas prices, giving further support to auto sales and manufacturing. We believe this will motivate the Federal Reserve to begin measures to normalize monetary policy in the third quarter of this year, continuing at a cautiously steady pace into 2016 and 2017, likely keeping interest rates relatively low for some time." - The Russian Central bank said yesterday that its gold reserves grew by a 600,000 ounces (18.7 tonnes) in December – the ninth successive month of gold reserve increases. Russia has now more than tripled its gold reserves in the past ten years. The ruble has fallen in value by almost 50% in the past 12 months which makes the nation’s gold reserves ever more important to its global economic status – According to LuxCSD the Taiwan Depository and Clearing Corporation (TDCC) has announced, effective Sunday (January 25th) the firm’s BIC will change from TDCCTWT1 to TDCCTWTP. Customers should quote the TDCC's new BIC in field 95P::PSET//TDCCTWTP of their settlement instructions – Moody's today upgraded the Corporate Family Rating (CFR) of Stabilus S.A. to B1 from B2 and the Probability of Default Rating (PDR) to B1-PD from B2-PD. At the same time the rating agency upgraded the instrument ratings assigned to the Senior Secured Notes issued by Servus Luxembourg Holding S.C.A. to B1 from B2. The outlook on all ratings remains positive – The US Federal Reserve Bank of New York says its daily Fed Funds effective rate is now 0.12% (Low 0.30%, High 0.3125%) with four basis points of standard deviation - Vanguard Group, already the biggest mutual fund company in the world, has risen to second place as a provider of exchange-traded funds, says ETF.com—based on the success of its low-cost index funds, including ETFs. Boston-based State Street Global Advisors, has dropped from second to third. Even so, SSGA still has the largest ETF in the world, the SPDR S&P 500 ETF (SPY | A-98) - The Straits Times Index (STI) ended +41.21 points higher or +1.22% to 3411.5, taking the year-to-date performance to +1.38%. The FTSE ST Mid Cap Index gained +0.97% while the FTSE ST Small Cap Index gained +0.23%. The top active stocks were CapitaLand (+4.09%), DBS (+0.80%), SingTel (+0.76%), UOB (+0.72%) and Noble (-0.47%). The outperforming sectors today were represented by the FTSE ST Real Estate Holding and Development Index (+2.31%). The two biggest stocks of the FTSE ST Real Estate Holding and Development Index are Hongkong Land Holdings (+1.18%) and Global Logistic Properties (+1.57%). The underperforming sector was the FTSE ST Oil & Gas Index, which gained +0.16% with Keppel Corp’s share price unchanged and Sembcorp Industries’s share price declining +0.93%. The three most active Exchange Traded Funds (ETFs) by value today were the SPDR Gold Shares (+0.77%), IS MSCI India (+1.89%), DBXT MSCI Asia Ex Japan ETF (+1.57%) –

Hedge Fund Association asks SEC for clearer rules on vetting investors; supports hedge fund advertising in comment letter

Wednesday, 06 June 2012
Hedge Fund Association asks SEC for clearer rules on vetting investors; supports hedge fund advertising in comment letter The Hedge Fund Association (HFA), an international organisation that represents hedge funds, service providers and investors, says liberalised advertising and solicitations rules contained in the new Jumpstart Our Business Startups (JOBS) Act could help hedge funds raise assets and “encourage emerging managers to continue to enter the industry.”  The HFA has also asked the SEC for clearer rules to verify that potential investors are indeed accredited as a way to “add further stability to the industry.” http://www.ftseglobalmarkets.com/

The Hedge Fund Association (HFA), an international organisation that represents hedge funds, service providers and investors, says liberalised advertising and solicitations rules contained in the new Jumpstart Our Business Startups (JOBS) Act could help hedge funds raise assets and “encourage emerging managers to continue to enter the industry.”  The HFA has also asked the SEC for clearer rules to verify that potential investors are indeed accredited as a way to “add further stability to the industry.”

The HFA’s position is outlined in a comment letter submitted to the Securities and Exchange Commission on June 6th.  The SEC is soliciting comments before implementing regulations, scheduled to be published July 5th this year, which are expected to allow hedge fund management companies to communicate directly with potential investors for the first time in their history. Hedge funds would still be restricted to selling their securities to accredited investors such as individuals with a minimum $1m net worth and qualified institutional investors.

Hedge funds have been banned from soliciting or advertising their private offerings to the general public in exchange for being exempt from having to register their interests or shares with the SEC under Rule 506 of Regulation D. The lack of a clear definition of a solicitation has created confusion about what hedge fund managers can disclose in their marketing materials, at conferences or in the media.



Richard Heller, chairman of the HFA’s Regulatory and Government Advisory Board and author of the letter on behalf of the HFA, says the JOBS Act provision lifting the advertising ban does not weaken existing anti-fraud provisions forbidding people from using false or misleading statements to induce investors to invest in hedge funds. If anything, he wrote, “providing rules to strengthen a manager's decision to accept a subscriber's investment by following the rules to be drafted by the SEC that will for the first time provide a road map for managers to rely upon will, we believe, add further levels of compliance that the Dodd-Frank Act initiated.” 

The HFA’s comment letter comes two months after the historic signing of the JOBS Act, which the association praised at the time as being a boon to emerging hedge fund managers.  The HFA’s comment letter, says the association’s President, Mitch Ackles, ensures that regulators are able to consider the views of the whole industry, including its service providers, investors and those smaller managers which represent a majority of hedge fund firms.

“In addition to promoting a better understanding of and education about hedge funds, our association’s mission is to give a voice to the concerns of industry participants who may not otherwise have been heard,” says Ackles.  “That’s why we include all of our members in developing policy initiatives,” he adds.

A transcript of the letter, addressed to Elizabeth M Murphy at the SEC is provided below:


The HFA believes that amending the rules that relate to capital formation is fundamental to the continued growth of the hedge fund industry and that allowing general solicitations to further that outcome will encourage emerging managers to continue to enter the industry. Further, providing rules to strengthen a manager's decision to accept a subscriber's investment by following the rules to be drafted by the SEC that will, for the first time, provide a road map for Managers to rely upon will, we believe, add further levels of compliance that the Dodd-Frank Act initiated. While Managers have had subscription agreements in place (and internal policies to provide checks and balances for the manager), having rules in place to verify that potential investors are indeed accredited will add further stability to the industry.

The HFA recognises that the SEC may be concerned that opening the door to general solicitation may, to some degree, open the door to people who wish to perpetrate fraud in connection with false or misleading statements to induce investors to invest in hedge funds. We would remind the SEC that the JOBS Act in no way limits Section 10b-5 promulgated under Section 10 of the Exchange Act, nor does it limit Section 17(a)0 of the Securities Act. All of the state securities or "Blue Sky" rules relating to fraud remain unaffected by the JOBS Act and hedge fund managers continue to be subject to the anti-fraud provisions of the Investment Advisers Act.

Lastly, we note and support the changes to Section 3(c)(7) and would hope that the SEC will amend the language of the Investment Company Act as being available only to offerings not involving a public offering to be consistent with the JOBS Act.

The letter is signed by Mitch Ackles, president of the Hedge Fund Association and
Richard Heller,  chairman, Regulatory & Government Advisory Board, at the Hedge Fund Association.

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