Aima welcomes Iosco hedge fund regulation principles

Date: Tuesday, June 23, 2009
Author: Hedgeweek.com

The Alternative Investment Management Association has welcomed the principles for hedge fund regulation published by the International Organization of Securities Commissions.
 
Andrew Baker, Aima chief executive, says it supports global registration for managers and the reporting of systemically relevant information by managers of large hedge funds to their national regulators.
 
'We are also delighted that Iosco refers to the 'development, implementation and convergence of industry good practices' because Aima has been extremely active in this area and is continuing a great deal of work on it with the other groups involved. We are following up on a G20 action point in this respect,' he says.
 
'Finally, we are pleased that Iosco have recognised that many of the observations contained in the report may also be applicable to other market participants and that hedge fund managers are already subject to registration/authorisation and on-going supervision/monitoring in most major jurisdictions so it is incorrect to describe the sector as 'unregulated'.'

However, Baker stresses that it is hedge fund managers, rather than the funds themselves, that should registered. Iosco also mentions that hedge funds use derivatives for speculative purposes without stating that exchange-traded and over-the-counter derivatives are principally used by the relevant market participants for risk management purposes.
 
'Finally, we are concerned that these recommendations may lead regulators to seek quantity rather than quality of data. It is important that regulators have the expertise and resources to deal with the data they receive,' Baker adds.