WEST PALM BEACH, FL (HEDGECO.NET) – The Financial Supervisory Commission (FSC), a Korean financial regulator said it is examining the records and activities of hedge funds doing business in Korea.This investigation, according to the FSC, is to provide the agency with a better understanding of how hedge funds conduct their investment activities with particular reference to the Korean domesticmarkets. The FSC explained that the inquiry was not in any way designed to limit hedge fund activities in the country. The sole purpose, according to the FSC, is to gather information oninternational funds doing business in Korea.
An FSC official said, �Most analysis and research on the trend of foreign investors have focused on the quantitative aspect, which is the absolute amount of their equity investment and trading activities, but not much has been done on the qualitative aspect.� The official added, �We do not have sufficient information on hedge funds such as the number of funds operating in Korea, the amount of assets invested and investment trends.�
It is unclear if this move was the result of current SEC regulatory efforts to get US based hedge funds to register with the agency. Hedge funds operating in Asia have been growing over the years as some Asian countries began to pass favorable laws for hedge fund operation. There are estimates of about 400 hedge funds operating in Asia, managing about US $49 billion in investor assets.
The Asian hedge fund industry has had problems recruiting experienced hedge fund managers, according to recent reports. There are shortages in Asia, of experienced hedge fund managers specializing in stock short-selling techniques. Short selling techniques involve selling short borrowed securities, which the seller does not own. Hedge fund managers to profit from falling stocks often use this strategy. Managers using the strategy will eventually buy back such securities, with the hope of making money from the price differentials. Singapore, Hong Kong and Japan are major hedge fund centers in the Asian region.
Paul Oranika
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HedgeCo.Net
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