Basics about Form D and Blue Sky Filings

Form D and Blue Sky Filings

This post discusses the basics of what a fund manager should know about Form D and Blue Sky Filings especially when starting a hedge fund.  In addition to the federal securities laws, every state has its own set of securities laws.  These are commonly referred to as “blue sky laws.”  They are designed to protect investors against fraudulent sales practices and activities.

While these laws do vary from state to state, most state laws typically require companies making offerings of securities to register their offerings before they can be sold in a particular state.  Some states may have specific exemptions.  The laws also license brokerage firms, their brokers, and investment adviser representatives. The filing fees are approximately $150 per state.

You don’t have to file in every state in the Union on day one! For most investment managers, filing in two or three states will more than suffice. You only need to file in the state where you are currently offering the fund to investors.  If you meet someone in another state, file there when it becomes evident that they will invest. You can file at any time.



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