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In addition, they will have to provide details about their business, as well as information on liquidity of assets and use of side pockets. While IOSCO doesn’t have enforcement powers, the regulators that are members agree to comply with its guidance.
The aim is to determine possible systemic risks arising from the hedge fund industry. IOSCO said participants are best monitored through their trading activities, the markets they operate in, funding, counterparty information and information on technological support.
“IOSCO believes that regulators should seek to develop a comparable and consistent set of data to be collected from local hedge fund managers and advisors to monitor systemic risks and prevent gaps in regulatory reporting requirements,” said Kathleen Casey, a commissioner a the SEC and chairman of the IOSCO Technical Committee, which drafted the template.
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