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.
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