More investors are buying hedge funds, which has raised regulators concerns. How can investors learn more about the risks of these investments?
In reviewing the sales practices of securities firms, the industry’s self-regulator, the NASD, raised concerns that firms may not be fulfilling their obligations to investors. The NASD reminded firms that they must provide a balanced disclosure of the features and risks in promotions about hedge funds, assess whether these investments are suitable for their clients, ensure that there is adequate supervision of the brokers offering these investments, and provide training on the features, risks, and suitability of these products. More information about the NASD’s concerns is available at: http://www.nasdr.com/pdf-text/0307ntm.pdf. The SEC has stepped up its efforts to educate investors and published an online brochure: Hedging Your Bets: A Heads Up On Hedge Funds And Funds Of Hedge Funds. The publication urges investors to read the prospectus and related financial materials closely, learn how the fund is valued, ask questions about the fees involved in buying, holding, and selling these
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- More investors are buying hedge funds, which has raised regulators concerns. How can investors learn more about the risks of these investments?
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