Hedge funds are increasingly being scrutinized by different watchdogs. However, the differences in the way the groups want to regulate funds may generate more talk than action, according to The Wall Street Journal. Hedge funds are loosely regulated pools of capital. and many regulators and central banks worry that hedge funds may pose a considerable risk to the global financial system and could precipitate or worsen a monetary crisis. However, countries cannot seem to coordinate on the efforts. In Europe, officials are pushing for more disclosure of hedge fund portfolios or a rating system. German officials have been very aggressive, using their chairmanship of the Group of Eight leading nations. The U.S. may propose a Securities and Exchange Commission rule that limits the investors who qualify to invest in hedge funds. Both the British and the U.S. are taking a hands-off approach and are supporting additional study. Hedge funds felt victory from a U.S. appeals-court ruling that stopped an initial attempt by U.S. regulators to force hedge fund advisors to register with the SEC last year. Nonetheless, hedge funds are bracing for increased inquiries, which may include congressional hearings in the U.S. Lisa McGreevy, a former lobbyist with the Financial Services Roundtable, was recently hired at the Managed Funds Association. “We are trying to work with the policymakers to help them understand what the asset managers are doing because the big question here is: ‘Who are they and what are they doing’,” McGreevy said. SEC enforcement officials have said they expect to bring several enforcement actions against hedge funds in the near term. Hedge funds are adamant about not having regulation, arguing that providing details of their business could cause them to lose their competitive edge and hurt returns. 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.
Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.
Insight and analysis into the management, marketing, operations and technology of the asset management industry.
Have an account? Sign In