New York Times Blogs – The compulsory registration of hedge fund managers was backed by a global regulatory body on Monday in an effort to restore investor confidence.

The International Organization of Securities Commissions, representing regulators from more than 100 countries, said the $1.3 trillion hedge fund sector did not cause the credit crunch but may have amplified its effects.

IOSCO’s final six principles flesh out a statement made in March, and a pledge from the G20 group of industrialized and emerging market countries in April, that all hedge fund managers should be registered and directly supervised, Reuters reported. Those principles include mandatory registration of hedge fund managers while prime brokers who provide funding to hedge funds should also be subject to mandatory registration and supervision.

The European Union has also put forward a draft law that goes further than IOSCO, while the U.S. is also planning mandatory registration of hedge funds but so far in a less extensive way than the EU.

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