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Aima expresses support for global initiative on hedge fund regulation

Date: Tuesday, February 24, 2009
Author: Hedgeweek.com

The London-based Alternative Investment Management Association has expressed support for global efforts to achieve a consensus on coherent regulation for hedge funds, but continues to emphasise that they were not responsible for creating the ongoing market turmoil.

'Aima is extremely supportive of the ongoing efforts to resolve the global financial crisis,' says the association's chief executive Andrew Baker. 'We agree that a global problem requires a global solution and we are working very closely with policy makers and regulators at a national, European and international level to reach global consensus on the future regulatory framework of the hedge fund industry. We hope that these initiatives succeed and believe that the active co-operation and leadership we are providing on behalf of the industry is constructive.'

However, he points out that hedge fund managers in Europe are already 'rigorously' regulated at both national and European level. 'For example, a significant majority of Europe's hedge fund industry is based in the UK, and the FSA has a stringent process of authorisation of hedge fund managers and a highly effective system of supervising the largest hedge funds,' Baker argues.

'Other national regulators across Europe also have demanding and effective structures in place. The industry is also subject to a whole range of European directives.

'The hedge fund industry in Europe and elsewhere has been hit very hard, like other sectors, by the current crisis, but has responded in an orderly way and has not triggered any systemic risks. Hedge funds did not cause the present market turmoil, and because they have an essential role in providing liquidity to the markets, will be important in assisting any eventual recovery.'

Baker notes that with a significant proportion of its assets under management coming from institutional investors, the hedge fund industry 'plays a key role in preserving savings and pensions across Europe and also generates tens of thousands of jobs across the continent. It is part of the solution, not part of the problem.'

Founded in 1990, Aima has more than 1,200 corporate members in 43 countries including hedge fund managers, fund of hedge funds managers, prime brokers, providers of legal and accounting services and fund administrators.