JOBS Act is Not a Regulatory Cure-All for Private Funds

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The Jumpstart Our Business Startups Act (JOBS Act or Act), which was signed into law on April 5, 2012, could improve substantially the fundraising prospects for private funds. Elimination of the prohibition against general solicitation and general advertising will increase exposure for private funds and, consequently, the pool of prospective investors. Although the JOBS Act and rules to be adopted in connection with the Act will in some ways revolutionize private offerings, it is important for private funds to keep in mind the restrictions on U.S. private offerings that are unaffected by the JOBS Act.

General partners, managers and sponsors of private funds often struggle with the prohibition against general solicitation and general advertising as they raise new capital. Non-U.S. private funds, in particular, which may not be subject to similar restrictions under local law, must navigate gingerly around the cumbersome prohibitions. Those funds will enjoy benefits of relaxed offering rules, but should not forget the applicable restrictions that remain for private funds that offer interests in and into the United States.

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Published In: Administrative Agency Updates, Business Organization Updates, Communications & Media Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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