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Hedge Fund Report Summary of Rules Affecting Investments in Initial Public Offerings

July 27, 2011

By The Investment Management Practice

With a wave of initial public offerings (IPOs) expected in the next few months, hedge fund managers should be aware of FINRAs rules with regard to investing in new issues. Fund managers who intend to invest in IPOs will need to comply with the certification requirements under Rules 5130 and 5131 by making annual representations about their eligibility to acquire new issues. Fund managers will likely need to obtain additional information from their investors in order to satisfy FINRAs eligibility requirements. We describe each rule in more detail below, as well as the measures that fund managers should consider implementing to meet these requirements.

Practice Areas


Image: Michael R Rosella
Michael R Rosella
Partner, Corporate Department
Image: Arthur L Zwickel
Arthur L Zwickel
Partner, Corporate Department
Image: Christian Parker
Christian Parker
Partner, Corporate Department
Image: David A Hearth
David A Hearth
Partner, Corporate Department