Last year, Congress passed the JOBS Act, a new bill that was designed to foster the growth of startups. Hedge funds were particularly excited about the bill because it was expected to allow the Securities and Exchange Commission to form new rules for the industry.
However, in the months since the bill was passed, little has come from the JOBS Act. Hedge funds are still waiting to hear from the SEC, and investors are still jumping through hoops.
“That’s something that’s very frustrating for us as a firm because we are someone that provides data to only the accredited audience currently,” Evan Rapoport, CEO of HedgeCo Networks, told StreetID. “In order to come on to HedgeCo, and to view hedge fund information, you first have to go through an online questionnaire that asks some pretty personal questions, such as your net worth, your liquid net worth, how many funds have you invested in, etc.”
The SEC requires HedgeCo to ask those questions in order to prove that anyone who has access to hedge fund data “qualifies as an accredited investor pursuant to SEC guidelines.”
“The user not only has to put this information online, but he then has to get a phone call from one of our representatives over here where we verbally verify that information prior to giving him or her access to the website,” said Rapoport. “That’s a fairly arduous process.