Hedge Funds Allowed to Advertise Freely Pending a Notice to the CFTC

The U.S. derivatives regulatory agency CFTC (Commodities and Futures Trading Commission) has announced the removal of a legal limitation which prohibited hedge funds and other privately operating funds to broadcast televised, Internet and other media ads.

In a letter by the CFTC, a decision permitting private funds to advertise has been unveiled earlier this week, acting as a harmonization effort to put outdated rules in sync with a 2012 law which lifted the advertising ban for hedge funds dating to 80 years ago in the aftermath of the Great Depression.

The move contrasts sharply with the cause and effect observed back in the 30’s - as “main street” wealth suffered at the time from excessive losses on the stock market, the government hurried to limit the exposure of the public to independent investment services provided by hedge funds and other private investment vehicles.

The law from 2012 became known as the Jumpstart Our Business Start-Ups (JOBS) Act, mandating the Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) to permit privately owned funds to advertise, however, the CFTC regulated entities were exempted from the decision.

All commodity pools willing to advertise would first have to notify the CFTC before embarking on an advertising campaign.