The Money Times – A U.S. House committee Thursday reviewed hedge funds, which the panel’s chair called "virtually unregulated."

Because they aren’t required to report on their holdings, leverage or strategies, "hedge funds are virtually unregulated," said Rep. Henry Waxman, D-Calif., chairman of the House Committee on Oversight and Government Reform. "Regulators aren’t even certain how many hedge funds exist or how much money they control."

That segment of the financial industry is "growing rapidly," Waxman said, adding he was concerned that hedge funds, as other financial sectors, could collapse.

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Reuters UK – Britain’s temporary ban on short-selling financial stocks is irksome for London’s hedge funds and is another factor which could help undermine the city’s pre-eminent position in Europe as a hedge fund base.

Short-selling is a key trading strategy for hedge funds as they aim to profit regardless of whether a stock is rising or falling, but London’s curbs come as rival centres seek to attract hedge funds to bolster their financial sectors.

Switzerland, France, Luxembourg and Scandinavia have all begun to emerge as alternative options for hedge funds looking for lower tax and a higher quality of life.

The European industry could follow the U.S. model and develop in a number of regional centres, although London’s upmarket St James’s and Mayfair districts are likely to remain the heart of the industry in Europe for at least the time being.

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