NASD Issues Interpretive Letter Prohibiting The Use of Related Performance Information In Hedge Fund Sales Material

Topics:
Securities litigation
Tags:
Finance,
Financial Services,
Hedge Fund,
Investment,
NASD,
Performance,
Schulte Roth & Zabel
Source:
Schulte Roth & Zabel

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Overview: On October 2, the National Association of Securities Dealers, Inc issued an interpretive letter to the Securities Industry Association. Among the conclusions set forth in the Interpretation was the NASD's view that Rule 2210 of its Conduct Rules prohibits a member from publishing or distributing hedge fund sales materials that present related performance information, even if a non-member, such as a hedge fund manager, prepared the sales materials. Because the Interpretation is an expression of the NASD's views regarding the application of an existing rule, it is effective immediately and NASD members that participate in the sale or distribution of hedge fund interests should comply immediately. The interpretation indicated that the NASD is currently considering whether to amend the Proposed Rule to permit related performance information in hedge fund sales material.

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Format: PDF | Size: 155KB | Date: Oct 2003 | Pages: 3

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