Money managers under the microscope
Given the amount of political posturing in recent months, few hedge fund managers would deny that more regulation is coming. The question seems to be what will it look like when it finally arrives?
While the weekend’s meeting of G20 finance ministers in Horsham was dismissed by some as a damp squib, it did at least in the area of hedge funds paint part of the picture of what future hedge fund regulation might look like.
Ministers proposed that hedge fund managers are registered and that they disclose information needed by regulators to assess any systemic risks they may pose — similar to what was recently proposed by industry body AIMA.
Meanwhile, as revealed by Reuters, industry bodies AIMA, the MFA and the PWG wrote to the Financial Stability Forum, which is putting forward recommendations to the G20 ministers, on Thursday night, pledging for the first time to work together towards common standards.
The timing of the Alternative Investment Management Association’s hedge fund disclosure initiative indicates just how strong the winds of change are blowing in hedge fund land.
Coming just a day after ECB President Jean-Claude Trichet called the credit crisis “a loud and clear call” for extending hedge fund regulation, the move shows the hedge fund industry feels it must be more active in deciding the future shape of regulation.