News Summary: SEC lifts ban on wide hedge fund ads

AP News
Posted: Jul 10, 2013 5:45 PM

ADS ALLOWED: For the first time, hedge funds will be allowed to advertise to the general public under a rule adopted by federal regulators.

80-YEAR BAN: The Securities and Exchange Commission voted to lift a 1933 ban that prevents hedge funds, private equity firms and other private investment managers from marketing their products to a wide audience.

SELECT GROUP: Hedge funds are still allowed to sell securities only to an exclusive group of investors: those with a net worth of at least $1 million excluding their primary residence, or annual income of more than $200,000 (or over $300,000 with a spouse) in each of the two most recent years. About 7.4 percent of U.S. households have a net worth of $1 million or more.