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Reuters – A global regulatory body backed compulsory registration of hedge fund managers on Monday to restore investor confidence, saying the $1.3 trillion sector did not cause the credit crunch but may have amplified its effects.
The International Organization of Securities Commissions (IOSCO) represents regulators from over 100 countries, including the United States, Japan and the 27-nation EU.
Its final 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 UK – The Cayman Islands, home to most of the world’s hedge funds, is planning to reveal more information about them, the country’s regulator told Reuters, as pressure on the secretive industry rises.
The Cayman Islands Monetary Authority (CIMA) could make available data such as a fund’s directors, manager, auditors and administrator, an executive said.
Earlier this month, the offshore centre joined the global regulatory body IOSCO (the International Organisation of Securities Commissions), which on Monday backed compulsory registration of hedge fund managers.
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.
A hedge fund fraud that involved a pair of funds claiming to hold more than $800 million in assets has been halted, according to the US Securities and Exchange Commission.
In a statement, the regulatory body said the two funds lost money and contain less than $1 million.
Bradley Ruderman is alleged to have raised more than $38 million from investors via the two hedge funds, Ruderman Capital Partners and Ruderman Capital Partners A.
He is accused of falsely claiming that the investment vehicles held positions in established securities such as Wal-Mart Stores, Apple and Microsoft, as well as stating prominent people were investors in his funds, when they were not.
