Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Caribbean Net News – The UK Serious Fraud Office is investigating sales of credit-default swaps and structured-finance products, including collateralized debt obligations, prior to the credit crisis, following up an earlier investigation into a hedge fund and a related British Virgin Islands-registered company.
The SFO is looking into whether banks sold such products with flawed valuations, said Sam Jaffa, a spokesman for the government agency in London. No specific companies or credit rating agencies have been targeted under the investigation, he said.
“We’re looking generically at what might give us a cause for concern or a possible lead for finding out more,” Jaffa said in an e-mail Monday. “There’s no suggesting that across- the-board valuations were flawed. However, how valuations are arrived at, what is bundled into the funds and how they were sold are areas of interest.”
West Palm Beach (HedgeCo.net) – G8 Finance Ministers announced their endorsement of a global regulatory framework for financial institutions worldwide, "We agreed to create a coherent framework which builds on work done by the IMF, World Bank, OECD, FSB, FATF, and other international organizations, to strengthen the global market system." the G8 said in a statement on Saturday.
"To ensure effectiveness, we will make every effort to pursue maximum country participation and swift and resolute implementation. We have agreed on the objectives of a strategy, "the Lecce Framework", to create a comprehensive framework, building on existing initiatives, to identify and fill regulatory gaps and foster the broad international consensus needed for rapid implementation."
The Lecce Framework recognizes that there is a wide range of instruments, both existing and under development, which have a common thread related to propriety, integrity and transparency and classifies them into five categories: corporate governance, market integrity, financial regulation and supervision, tax cooperation, and transparency of macroeconomic policy and data.
Specific issues covered include, inter alia, executive compensation, regulation of systemically important institutions, credit rating agencies, accounting standards, the cross-border exchange of information, bribery, tax havens, non-cooperative jurisdictions, money laundering and the financing of terrorism, and the quality and dissemination of economic and financial data. International institutions and fora have already developed a significant body of work addressing a number of important issues in these areas, but, in many cases, the initiatives suffer from insufficient country participation and/or commitment, the G8 said.
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Reuters – Hedge funds, credit rating agencies and all other important market players should be subject to regulation based on a global approach, European Central Bank President Jean-Claude Trichet said on Monday.
The worst financial crisis in over 80 years has sparked a rethink of how markets should be supervised to cut excessive risk-taking by banks.
"The current crisis is a loud and clear call for extending regulation and oversight to all systemically important institutions — notably hedge funds and credit rating agencies — as well as all systemically important markets — in particular the OTC derivatives market," Trichet said.
"What is currently under discussion is the precise way in which these elements should be integrated within an overall regulatory framework," he told a conference on supervision.
New York (HedgeCo.Net) – Two senators are pushing for greater regulation of hedge funds, introducing legislation that would call on the U.S. government to oversee them.
Michigan Senator Carl Levin, a Democrat, and Iowa Senator Charles Grassley, a Republican, passed the legislation on Thursday, amidst a much broader attempt by President Barack Obama to vamp up the entire regulatory system. It also comes at a time when the administration is still in talks over how to distribute the remaining $350 billion in the Troubled Asset Relief Program.
“We need to regulate firms that are big enough to destabilize our economy if they fail," said Levin. "It’s time to subject financial heavyweights like hedge funds to federal regulation and oversight to protect our investors, markets and financial system."
The overhaul of the regulatory system is intended to restore faith in an economy that has been shaken by fear. In addition to tighter regulation of hedge funds, the broader plan will include greater oversight of mortgage lenders and credit rating agencies.
Regulation of hedge funds has long been a debate in the financial world. While some push for greater transparency, hedge funds have taken the defensive, saying that they provide plenty of transparency to their clients, with performance reports and other data usually available via a secure website. However, the collapse of many major hedge funds along with the handful of fraud cases has forced the government to try again.
The closest that hedge funds have come to regulation was when they were required to register as investment advisors with the U.S. Securities and Exchange Commission. That requirement was overturned in 2006.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
Reuters – The Obama administration plans to tighten the nation’s financial regulatory system, including stricter federal rules for hedge funds, credit rating agencies and mortgage brokers, the New York Times reported in Sunday editions.
The broad changes include increased oversight of the complex financial instruments that helped spawn the current economic crisis, the newspaper said on its website Saturday night.
The newspaper based its story on interviews with officials as well as confirmation hearings for senior administration appointees, and a recent report by an international committee led by Paul Volcker, one of President Obama’s chief economic advisers.
