In remarks to the Managed Funds Association, SEC Chair Mary Jo White encouraged hedge funds to embrace increased transparency under post-financial crisis rules and justified the SEC's expanded jurisdiction, rule-making and enforcement efforts involving private funds.
White reported that, since the passing of the Dodd-Frank Act and the JOBS Act, private funds and their advisers have moved "from what some would say was a secretive industry, to a widely recognized and influential group of investment managers." She said that transparency into private funds' operations will benefit investors, the public and regulators and suggested that it would also "significantly redound" to the benefit of private funds and their advisers.
White cited the proposal to require private funds to provide information about Rule 506 offerings, including those that use general solicitation and general advertising under new Rule 506(c), as an example of the SEC's continuing interest in gaining insight into this increasingly important part of the market. The data collected under the proposal would give the SEC data on the size of the private placement market, who is conducting offerings through private placements, and why offerings fail. This data, she said, will help the SEC "ensure that this new market, which private funds dominate, is conducted in a manner that furthers both new capital formation and investors' interests."
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