Friday 31st October 2014
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FRIDAY TICKER: OCTOBER 31TH 2014: - The re-election of President Dilma Rousseff on Sunday has important implications for Brazil's Baa2 sovereign rating, as well as for the credit quality of the country's banks, corporations and securitisations, says Moody's. The rating agency says the narrow margin of her victory underscores the challenges she faces as she looks to revive Brazil's lacklustre economic performance - Facebook has reported third quarter results, again showing strongest year-on-year growth in mobile, where daily active users (DAUS) rose by 39% to 703 million, while overall daily users rose 19% to 864 million DAUS - Francisco Partners, a global technology-focused private equity firm, today announced it has completed the acquisition of Vendavo, Inc., a leader in business-to-business (B2B) pricing solutions. David Mitchell, an operating partner of Francisco Partners, will join Vendavo as CEO and lead the company’s worldwide business strategy and operations. Incumbent CEO Neil Lustig will transition into an advisory role with Vendavo. Francisco Partners now has a controlling stake in the Silicon Valley company. The acquisition by Francisco Partners provides additional resources to bolster Vendavo’s aggressive growth strategy, enabling the company to expand sales and marketing while accelerating cloud development. Vendavo completed a record first half of 2014, with nearly 30-percent growth in bookings, and the release of two breakthrough solutions for price and sales effectiveness. Based in Mountain View, Calif., Vendavo provides revenue and price optimisation solutions for B2B mid-market and enterprise companies.Francisco Partners was advised by JMP Securities, and Vendavo was advised by William Blair. Financial terms of the transaction were not disclosed – The International Finance Corporation, or IFC, issued the four-year, triple-A rated bond only to Japanese retail investors, tapping into the growing interest in low-risk investments with a social or environmental focus. The World Bank, has sold several billion dollars in green bonds over the past six years, with proceeds going to help countries and firms cut greenhouse gas emissions and adapt to climate change. The latest offering, Inclusive Business bonds, would finance firms that work with or sell to the 4.5bn people in the world that make less than $8 a day. IFC said while most poor people do not spend a lot individually, as a whole they represent an estimated $5trn consumer market that firms could tap into - NAKA Mobile, a telecoms and technology specialist based in Switzerland, has claimed the industry’s first virtualised evolved packet core (vEPC). Utilising Cisco’s NFV services, NAKA claims it will transform its network architecture, expand beyond Switzerland, and provide its mobile Internet services to customers across the world - The Internet Society and Alcatel-Lucent have agreed to provide support and equipment for the development of the Bangkok Internet Exchange Point (BKNIX). The project will utilise the Internet Society’s Interconnection and Traffic Exchange (ITE) programme and is intended to deliver a stronger and more robust Internet infrastructure for South East Asia.

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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