Hedge fund regulation fears

EDINBURGH, MADRID and SINGAPORE – Regulators and market participants around the world are voicing concerns about the relative state of regulation of hedge funds, particularly regarding potential weakness in internal systems and controls in funds, and the potential for fraud.

The International Organisation of Securities Commissions, based in Madrid, released a report in March on how funds are regulated around the world. The study concludes that none of the regulators who responded had adopted a formal, legal definition of the term 'hedge fund'. While most jurisdictions reported some kind of regulatory regime for hedge funds – such as registration – the strength and scope of those regimes varied considerably.

When it comes to fraud related to hedge funds, the study had

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