Bloomberg- Hong Kong Monetary Authority Chairman Joseph Yam said he’s displeased with the low level of disclosure by hedge funds compared with other investors.
“I have not been happy with the asymmetry in transparency,” Yam said after a speech at a forum in Hong Kong today. “It makes it very difficult for regulators to do a proper job. We are sometimes sweating and being very concerned. It’s something that needs global efforts to address.”
Tightening rules in Hong Kong alone would risk pushing hedge fund operators into other Asian markets. The funds managed $33.5 billion of assets in the city in March 2006, a 268 percent increase over two years, according to a survey released by the Hong Kong Securities and Futures Authority last October.
The pace of growth in parts of Asia exceeds the industry’s global average. Hedge fund assets worldwide almost tripled in the past five years to $1.75 trillion as of June, according to Chicago-based Hedge Fund Research Inc., as stock markets rebounded from a two-year slump and commodities soared.
In two years to June 2006, assets almost tripled in Australia, home to Asia’s largest hedge fund industry. In the 12 months to July, assets in Singapore more than doubled.
Direct regulation of hedge funds in Hong Kong is impractical, “if not impossible,” the SFC said in the October document, noting that many are based overseas, complicating supervision. Of Hong Kong’s 20 largest by assets at the end of March last year, 13 were offshoots of hedge fund managers in the U.S., U.K. and Japan, the SFC survey found.
