As hedge funds continue to reap assets--and gain influence as investors--European regulators are considering imposing new rules on them, The Wall Street Journal reports.
Corporate executives have been rankled in recent months by how hedge funds invested in their firms have thrown their weight around on proxy issues, even ousting the chairman and CEO of the German Bourse late last year. In many cases, the hedge funds' stakes have even been small. European regulators are also concerned that many hedge funds are pursuing unsophisticated investors.
The discussion over more tightly regulating hedge funds in Europe comes on the heels of the Securities and Exchange Commission's decision to require U.S. hedge funds to register with the SEC, starting this past February.
However, earlier this month, a group of regulators testified before the Senate that they need to have a better understanding of hedge funds before prescribing any additional regulations. That group included the Federal Reserve, Treasury Department, SEC and Commodity Futures Trading Commission.
Germany, in particular, is considering imposing stringent regulations on hedge funds, by requiring shareholders to file with regulators when their holdings exceed 3%, tougher than the 5% requirement in the U.S. and the 5% being considered throughout the European Union for commencement in January 2007.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.