NASD ruling might catch out hedge funds

Foreign hedge fund managers registering with the SEC might be caught out by a NASD ruling on IPOs, say lawyers. Foreign managers investing in US or non-US IPOs are subject to the US securities regulator’s ‘new issue’ ruling if those managers use a US broker/dealer.

The new issue ruling, enforced in 2004, restricts the buying of IPOs by various individuals, including NASD members, broker/dealers, hedge fund managers and anyone related to or reliant on them, and is enforced against US broker/dealers.

Hedge fund managers are therefore not allowed to buy IPOs through their US broker/dealers on behalf of any investors that would fall into any of these categories – unless those investments account for less than 10% of the fund’s assets.

NASD ruling might catch out hedge funds

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NASD ruling might catch out hedge funds

Thanks for your interest in Euromoney!To unlock this article:

Central Bank of Egypt’s drive for financial inclusion bears fruit

Egypt’s banking industry wants to see private sector soar

CIB’s CEO Al-Arab on realism, reform and resilience

Future capital markets infrastructure: Fungible, fractionalised and fused

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