Iosco releases recommendations for hedge fund supervision
Hedge fund oversight guidelines are the subject of the latest paper issued by Iosco
The paper says it looks to mitigate risks of trading and lack of transparency traditionally associated with hedge funds and asset managers - dubbed the shadow banking industry by supervisors.
"The recent financial crisis is not a hedge fund crisis, and indeed regulators recognise that hedge funds contribute to market liquidity, price efficiency, risk distribution and global market integration," said Kathleen Casey, chairman of Iosco's Technical Committee. "However, recent market events have given governments and regulators the opportunity to consider the possible role hedge funds may play in amplifying crises through their trading strategies, reliance on leverage and the need to liquidate positions quickly."
The report was prepared by the Technical Committee's Task Force on Unregulated Financial Entities, co-chaired by Italian prudential regulator Consob and the UK's Financial Services Authority (FSA).
Iosco says it has presented its findings to the G-20 Working Group on Enhancing Sound Regulation and Strengthening Transparency, ahead of the meeting by G-20 national leaders in London on April 2.
The guidelines come as US and European regulators are looking to supervise funds more closely, as their role in the unfolding crisis has become more pronounced - from frauds such as Bernard Madoff's $50 billion ponzi, to the impact of short selling on financial stability.
The closing date for submissions to the consultation report is April 30, 2009.
The recommendations may be read here.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
The standoff over separate account margining
CFTC issues sixth extension of no-action relief as long-awaited final rule stalls
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
EU banks lose relief on model test after FRTB delay
Deferment of new trading book regime to January 2025 eats into transition period for “erratic” P&L attribution test
Sunday night football and the Basel III endgame
Big banks, political advocates and housing organisations are unlikely allies in race to dropkick new capital regime
Futures exchanges seek clarity on China licensing regime
Hazy details on landmark Futures and Derivatives Law breeds legal uncertainty, unnerving operators
Some EU banks wanted option to start FRTB on time
Representatives of member states raised possibility with European Commission at July meeting discussing the delay
For US Treasury troubles, treat the cause not the symptom
Regulatory alarm about hidden risk in the Treasury futures market misses the point, fund association execs write
Iosco delays pre-hedging consultation to November
Review into controversial practice splits industry