Financial Times- Japan’s financial regulator, the Securities and Exchange Surveillance Commission, is concerned thatthe growing influence of hedge funds is encouraging insider trading and undermining the integrity of the country’s stock markets.
“We believe there is [a] risk . . .that hedge fund managers are involved in market misconduct . . . such as insider trading based on information obtained from prime brokers, or market manipulation,†says Kiyotaka Sasaki, director of strategy and policy co-ordination at the SESC. “Investment banks can’t survive unless they do business with hedge funds. The relationship between investment banks and hedge funds is too close.â€Â
The SESC is poised to crack down on hedge funds and other funds when the Financial Instruments and Exchange Law is implemented next month. This will require hedge funds with more than a certain number of Japanese investors to file or register with the FSA. Currently, hedge funds are not regulated in Japan.
