Politics & Regulation

Tighter guidelines for new issue subscriptions in the US


Hedge fund managers investing in new issues in the United States are required to update their fund subscription documents for new investors and to recertify eligibility of existing investors to purchase new issues. Under the so-called spinning prohibition rules adopted by the Financial Industry Regulatory Authority, FINRA-member broker dealers are not permitted to allocate new issues to restricted accounts such as hedge funds and entities connected to executive officers and directors of investment banks that could be current, former or prospective clients for the broker-dealers.

The rules were originally supposed to take effect in May 27 this year