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.
Economic Times – European leaders meeting in Berlin on Sunday backed oversight of the world?s financial markets and products, including hedge funds, and urged that sanctions be drawn up to punish tax havens.
A copy of the “chair’s summary” from a summit hosted by Chancellor Angela Merkel and seen by Reuters describes the situation in financial markets as “fraught” and says structural reforms and a focus on public spending are needed to emerge stronger from the global crisis.
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.
Reuters UK – Prime Minister Gordon Brown called on Thursday for greater regulation of hedge funds.
Speaking in Rome after a meeting with Italian Prime Minister Silvio Berlusconi ahead of April’s G20 summit, Brown also said leaders would focus their attention on how to tackle the financial crisis in Eastern Europe.
"Together we will support oversight of under-regulated sectors and I also support proper disclosure and transparency of hedge funds," he said. "The G20 is determined to address the financial crisis in Eastern Europe."
Street.Com – Financial authorities on the Cayman Islands are promising a legislative crackdown to bolster investor confidence in the post-Madoff era. But while the Caymans — long a hedge fund haven due to tax advantages and light regulation — may push for tighter oversight, experts predict they will not lose their status as hedge funds’ offshore crown jewel.
The Caymans have been touted in recent years as the "centre of choice" for hedge funds by Walkers, a major offshore law firm, as well as other service providers for several investor-friendly reasons.
CNBC – Top U.S. securities regulator said Tuesday she generally supported requiring hedge funds to register with the Securities and Exchange Commission.
SEC Commissioner Elisse Walter is the latest in a growing number of policymakers to express support for more oversight for the $1.4 trillion industry. "I generally do support that notion (of hedge fund registration)," the Democratic commissioner told Reuters in an interview. "But the devil is in the details. Registration has to be meaningful."
Reuters – State regulators urged Congress on Thursday to restore their authority to protect investors from fraud in the banking sector and to beef up oversight of hedge funds.
Hedge fund advisers should be subject to the same kind of scrutiny as investment advisers, the North American Securities Administrators Association told reporters.
The NASAA said Congress should give the Securities and Exchange Commission explicit authority to regulate the $1.4 trillion industry, which has the potential to destabilize markets.
New York (HedgeCo.Net) – SEC Commissioner Luis Aguilar said his agency should be given the authority to regulate hedge funds after urging Congress “to close the glaring loopholes in securities regulation.”
Aguilar, one of the agency’s five commissioners, is among many who are calling for greater oversight in an industry that has been ravaged by turmoil and most recently, fraud.
The SEC has been accused of lax regulation after a tumultuous year where many financial institutions imploded. That belief was further fueled after the string of recent fraud cases involving intricate Ponzi schemes, incling the Bernard Madoff scandal that swindled billions out of investors. Even since his infamous arrest, there have been a handful of cases that have surfaced, leaving a wake of angry investors with their fingers pointed to the SEC.
Mary Schapiro, who Barack Obama appointed as head of the SEC, has come out in favor of a mandatory registration by hedge funds, although she has not vocalized any wrong doing by the agency in recent months.
“Currently, the SEC is prohibited from exerting jurisdiction over particular financial instruments that seem to fall squarely within the agency’s mission,” Aguilar said, while stating his belief that the merging of the SEC with the Commodity Futures Trading Commission would remedy the situation of who regulates what.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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.
Connecticut Post – It was with amusement that I read that freshman U.S. Rep. Jim Himes, D-4, will now be a member of the House Financial Services Committee. Why? Because of his expertise? Does anyone realize that he was trained and made millions of dollars at Goldman Sachs? Yes, one of the firms that is responsible for the mess this country is in with exotic investments and subprime mortgages and plenty of greed!
We will never learn and the taxpayers will get fleeced again. Himes can work closely with Rep. Barney Frank and Sens. Christopher J. Dodd and Charles Schumer and others who managed to create quite a mess with a lack of oversight on subprime mortgages that were originated and sold in pieces on Wall Street.
West Palm Beach (HedgeCo.net) – Rolling Hills Ranches, LLC has has been in talks with a number of investors and hedge funds in recent weeks, engaging experts from the Master Planned Communities group of Kitchell Construction to provide planning oversight for further commercial development of the Rolling Hills Ranches community.
Von Jenson, General Manager, Rolling Hills Ranches, says, "If you’re invested in stocks to retire on…. you’ll definitely need a nice place to retire – Rolling Hills Ranches in northern Arizona is a great place to ease into a fresh lifestyle to enjoy yourself."
Kitchell is a diversified corporation providing general contracting, construction management and real estate development services to public and private sector clients from offices in Arizona, California and Nevada.
Rolling Hills Ranches is a developed ranch community located in northern Arizona. The ranch is comprised of lots suitable for home building or ranching and is ideal for those who wish to enjoy a rural lifestyle. Power and water are available and the community is bordered by paved roads on two sides.
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Bloomberg – Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions, according to a Federal Reserve-backed industry code to be implemented in the next six months.
The plan, which strengthens official oversight of trading, will be unveiled as soon as Jan. 5, said Thomas Wipf, chairman of the Treasury Market Practices Group and the head of institutional securities group financing at Morgan Stanley in New York.
“It seems quite obvious that the Fed and Treasury cannot and will not accept the status quo for much longer,” Wipf said in an interview.
Reuters – Belgian-Dutch financial services group Fortis said on Wednesday it had sold former ABN AMRO unit International Asset Management IAM.L as part of a strategy to bolster its balance sheet.
Fortis said in a statement it had sold London-based fund-of-hedge-funds manager IAM to its management, supported by certain third party investors.
The deal would not have a material impact on Fortis’ net profit per share but would give some solvency relief, it said.
Fortis two weeks ago announced a programme to shore up its finances by 8.3 billion euros (6.6 billion pounds), partly by selling assets, after buying parts of former rival ABN AMRO.
