Will the Babble of Many Taxes Scupper Hopes for Merger Mania and Cost Cutting under UCITS 4?
| Aug 30th, 2011 | Filed under: Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation, Investment Management Fees, Today's Post | By: AAA Staff |
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By Hamlin Lovell
Costs are the chief criticism of UCITS hedge funds: extra costs for the levels and layers of supervision and monitoring, from daily reconciliation and reporting, to depositaries and risk management, local regulators and the over-arching Luxembourg regulator that approves and monitors UCITS. The European Commission in Brussels has explicitly identified high Total Expense Ratios (TERs) as a concern, although it has not yet imposed any ceilings on costs. The regulator pragmatically recognizes that some of these costs historically stemmed from operating multiple feeder funds of small size for different European Union states. Just as each US state has its own insurance regulator, so too each EU member state has its own miniature SEC type regulator holding up hoops for funds to jump through.
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