Chicago partner David Matteson published an article in Futures on the Jumpstart Our Business Startups Act (JOBS Act), which he describes as a “gift from Congress … that will allow private funds (such as commodity pools) to advertise and use the Internet to find investors.”
The most basic concept of private offerings of funds has been that the offering be “private,” which has been interpreted to mean that general solicitation, including advertising, was not allowed. The JOBS Act, however, directs the Securities and Exchange Commission (SEC) to revise Rule 506 of Regulation D to provide that the prohibition against general solicitations and general advertising shall not apply to offers and sales of securities under Rule 506 so long as all the purchasers of such securities are “accredited investors.”
This drastic, far-reaching change in the law is especially unusual because the legislative record of the act does not show any involvement by the SEC, which has been directed to drastically amend its private offering regime.
David’s article attempts to answer “some of the likely questions fund managers will have regarding the change,” including the effect of the Investment Company Act, how the SEC will adopt the new rules, and how the JOBS Act will affect CPOs and fund managers.
To read the entire article, click here.