Browsing: Regulatory Environment

Hedge fund regulation, UCITS, Court Rulings, Regulatory developments

Regulatory Environment

Modeling the Volatility of Crypto Exchange Rates

Jan 31st, 2019 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Emerging Alternative Investments, Digital currencies, Risk Metrics and Measurement, Risk Management & Operations, Other Topics in A.I.

GARCH (Generalized Autoregressive Conditional Heteroskedasticity) models are very useful for estimating the volatility for a lot of more traditional assets (stocks and bonds) and their indices, which is why they’ve been around since the 1980s. But when they’re used for Bitcoin, Ethereum, Ripple, and Litecoin they yield incorrect predictions forRead More


Mergers, Acquisitions and Unscrambling an Omelette

Jan 8th, 2019 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment, Hedge Funds, Event-Driven Hedge Funds, Legislation/Court rulings

Those who pursue alpha through the highways and byways of mergers are surely paying close attention to the AT&T/Time Warner litigation, which may end by considerably reducing the regulatory risk that firms making a “vertical” purchase in the digital/communications world will hereafter face. This is one of the points raisedRead More


Top 5 Alpha Stories of 2018

Dec 30th, 2018 | Filed under: Newly Added, Private Equity, Hedge Fund Strategies, The A.I. Industry, Regulatory Environment, Hedge Funds, Event-Driven Hedge Funds, Equity Types of Private Equity, Emerging Alternative Investments, The Global Economy & Currencies, Digital currencies, Other Issues in Private Investments, Private Investments

Five stories stand out as the dominant stories for and about pursuers of alpha in the year just passed. There is nothing arbitrary about the list below. We admit, though, that the order in which we present them is arbitrary: that is, it is not a ranking, and it isRead More


10 Years Later: Reflections on the Madoff Meltdown

Dec 23rd, 2018 | Filed under: Newly Added, Media Coverage of Hedge Funds, The A.I. Industry, Due Diligence Process, Insolvency, Regulatory Environment, Legislation/Court rulings, Alternative Investments in Context, Business News

It was just about 10 years ago (Dec. 10, 2008) that Bernie Madoff acknowledged to his sons, Mark and Andrew, that he had “absolutely nothing left” of the funds that had been entrusted to him; that the investment fund that bore his name was “just one big lie.” There isRead More


McKinsey on Asia’s Asset Managers

Dec 16th, 2018 | Filed under: Newly Added, The A.I. Industry, Industry Size & Managers, Asset Managers, Regulatory, Regulatory Environment, The Global Economy & Currencies, Emerging markets, Economics, Allocating to A.I.

Assets under management for Asia’s managers have ballooned in the last 10 years, with an increase on average of 9% annually. Performance has been such as to encourage inflow. A recent study by McKinsey suggests that the “good times” will “keep rolling.” But it also cautions that the opportunities inRead More


SEC No-Action Letter: Eases Transactions with Affiliates

Oct 25th, 2018 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment

The Division of Investment Management of the Securities and Exchange Commission issued a no-action letter Oct. 12 that may make life easier for mutual fund boards and business development companies that have reason to engage in “affiliated transactions” as defined by the 1940 Act. In response to a request fromRead More


Some Clarity from the Delaware Supreme Court for Activists

Oct 18th, 2018 | Filed under: Newly Added, Hedge Fund Strategies, The A.I. Industry, Equity Hedge Funds, Regulatory, Regulatory Environment, Hedge Funds, Event-Driven Hedge Funds, Legislation/Court rulings

The Delaware Supreme Court, on Oct. 9, upheld the Chancery Court’s dismissal of a buyout/squeeze-out related lawsuit. In the process, it issued an opinion that indicates that the room for activist investors to use litigation or the threat of litigation to derail controlling shareholder transactions may be quite small, andRead More


National Market System: What to End; What to Mend

Oct 14th, 2018 | Filed under: Newly Added, Algorithmic and high-frequency trading, The A.I. Industry, Regulatory, Regulatory Environment, Commodities, Business News

The Principal Traders Group of the Futures Industry Association (FIA PTG) recently offered its thoughts on market structure, outlining one direction of reform for the Securities and Exchange Commission’s Reg NMS. Reg NMS (National Market System) was promulgated in 2005, in order to ensure competition among markets, and in theRead More


D’oh!

Sep 17th, 2018 | Filed under: Newly Added, What about beta?, Regulatory Environment, Risk Management & Operations

Much has been written this week about the fall of the house of Lehman. Too big to fail became “someone has to” and the rest is history. The demise of Lehman has been one of the many sign posts that defined the GFC and now, ten years on, traditional and socialRead More


New SEC Commissioner Dissents on a Bitcoin ETF

Aug 9th, 2018 | Filed under: Newly Added, The A.I. Industry, Regulatory, Crowdfunding, Regulatory Environment, Emerging Alternative Investments, Commodities, Other Topics in A.I.

The U.S. Securities and Exchange Commission recently (on July 26) disapproved of proposed rules changes that would have greenlit listing of the Winklevoss Bitcoin Trust on the Bats BZX Exchange.  In essence, the SEC has now rejected the listing of a Bitcoin exchange-traded product (ETP) on a national exchange. TheRead More


Justice Anthony Kennedy and Securities Law

Jul 10th, 2018 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment, Legislation/Court rulings

When Justice Kennedy announced that he is stepping down from the US Supreme Court, the profiles of his time on that bench said a good deal about abortion, homosexual rights, and other hot-button issues, but relatively little about Kennedy’s contribution to securities law. Yet it is worth remembering that heRead More


Thoughts on the European Regulation on Short Selling

May 3rd, 2018 | Filed under: Newly Added, Hedge Fund Regulation, The A.I. Industry, Equity Hedge Funds, Regulatory, Regulatory Environment, Hedge Funds

A new paper by Marco Dell’Erba and Giovanni Patti takes a look at a recent crisis involving the stock of the Monte dei Paschi di Siena (MPS), as a way of studying the pragmatics of the European Regulation on short selling (SSR). Dell’Urba is affiliated with the New York UniversityRead More


What Constitutes Price Manipulation?

Apr 24th, 2018 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Commodities, Commodities: Examples, Energy

The two commissions that serve as market enforcers in the United States, the Commodity Futures Exchange Commission and the Securities Exchange Commission, agree on a lot. (As, indeed, one would hope, since their work has considerable overlap.) One of the points on which the commissions have general agreement is theRead More


‘You Kick It’ and the Alternative Investment Industry

Apr 15th, 2018 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment, UCITs

The Alternative Investment Management Association, the London-based organization representing the interests of the world’s alternative investment industry, has issued a new whitepaper about the impact of the exit of the United Kingdom from the European Union. This ongoing event, known popularly as Brexit, has occupied armies of reporters, planners, andRead More


Stockholder Inspection Rights Survive Challenge in Delaware

Jan 16th, 2018 | Filed under: Newly Added, Private Equity, The A.I. Industry, Regulatory Environment, Equity Types of Private Equity, Private Investments

On December 29, 2017, the last business day of the expiring year, the Delaware Chancery Court, in a memorandum of opinion by Vice Chancellor Slights, upheld stockholders’ statutory books-and-records inspection rights against a defendant corporation that sought to invoke and considerably to widen the scope of the Delaware Supreme Court’sRead More


EC and US CFTC Reach Agreement on Venues

Oct 26th, 2017 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Commodities

The European Commission and the U.S. Commodity Futures Trading Commission have agreed on a “common approach on certain derivatives trading venues.” The idea is that parties in the U.S. should be able to do business with counter-parties in Europe in such a way that the latter comply with Article 28Read More


Half-Time Report on PwC’s Vision for Asset Management

Aug 20th, 2017 | Filed under: Newly Added, Industry Size & Managers, Regulatory, Regulatory Environment, Fees

Three years ago PwC published a paper on what they expect the asset management world will look like in 2020 – which is, as it happens, three years from now. We have reached the half-point in the hypothetical timeline. Much in the report still holds up, though of course itRead More


KPMG: Alternative Investment Industry Deal Momentum Continues

Aug 1st, 2017 | Filed under: Newly Added, The A.I. Industry, Liquid Alternative Investiments, Regulatory Environment, Liquid Alts, Other Topics in A.I.

The auditing giant KPMG says in a recent report on merger and acquisition activity in the alternative asset management world that there was a dip in activity in this space in 2015, that there was a rebound “to more normalized levels” in 2016, and that the momentum off of thatRead More


A Brief History of Hedge Fund Regulations in India

Jan 15th, 2017 | Filed under: Newly Added, Hedge Fund Regulation, The A.I. Industry, Industry Size & Managers, Regulatory Environment

The investment world now understands that politics and related matters of business climate in the Republic of India since the dramatic victory of the Bharatiya Janata Party in 2014. What is less well known is that alternative investment funds have been among the beneficiaries of the broader change. This storyRead More


Aftermath of 2008: Reactions to Decreased Liquidity

Nov 20th, 2016 | Filed under: Newly Added, The A.I. Industry, Liquid Alternative Investiments, Regulatory Environment, The Global Economy & Currencies, Liquid Alts, Macroeconomics, Finance & Economics, Other Topics in A.I.

A new report from State Street Corporation and the Alternative Investment Management Association says that nearly half of the market participants surveyed believe that decreased market liquidity is a secular change, not a cyclical one: that is, that it is a climate that is here to stay, not a rainRead More


Energy Infrastructure: The Midstream Sector

Nov 10th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Endowments & Foundations, Institutional Asset Management, Allocating to A.I.

Is it a stream or is it a sea? They seem to have gotten their hydrological imagery mixed up. But no, the “sea” in question is a literal sea, though the “stream” in question is a mere bit of imagery, so clichéd as such that no one sees it asRead More


Judge Rose: Libya’s SWF Heads Knew What They Were Doing

Nov 1st, 2016 | Filed under: Newly Added, The A.I. Industry, Institutional Investing, Regulatory Environment, Legislation/Court rulings, Institutional Asset Management, Allocating to A.I.

The economic historians of posterity have their work cut out for them here. There are doctoral dissertations in the works already, no doubt. And in time several scholarly careers will hang on this.   Those scholars will have to make sense of the political developments in late-Qaddafi Libya, of the roleRead More


Looking to the Technological Imperative: Where Has It Been?

Oct 6th, 2016 | Filed under: Newly Added, The A.I. Industry, Equity Hedge Funds, Regulatory Environment, Hedge Funds

On September 28, the Securities and Exchange Commission held an open meeting about a proposed shortening of the settlement cycle. The SEC’s staff has recommended that the settlement cycle for most broker-dealer transactions be shortened from three business days after trade date to two or, in the usual typographical abbreviation,Read More


Tick Pilot Program: A Progress Report

Oct 4th, 2016 | Filed under: Newly Added, Algorithmic and high-frequency trading, The A.I. Industry, Regulatory Environment, Business News, Finance & Economics

The long-awaited nickel-tick pilot program, an effort to test an alternative to the penny-or-less tick sizes that now prevail, , officially gets underway on October 3, and is scheduled to continue for two years. Securities have been selected and the phase-in schedule is set. The pilot is of significance, becauseRead More


THE NLRB AND THE HEDGE FUND—MUCH ADO ABOUT NOTHING?

Oct 3rd, 2016 | Filed under: Newly Added, Regulatory, Regulatory Environment

By Mark D. Schorr, Of Counsel,Crow & Cushing Maybe you thought that employers whose employees are not organized in unions or which are not involved in traditional labor activities like strikes, lockouts and picketing are outside of the jurisdiction of the National Labor Relations Board (“NLRB”).  If you did, you wouldRead More


Research, Unbundling and MiFID II

Sep 20th, 2016 | Filed under: Newly Added, Investor Relations, The A.I. Industry, Regulatory Environment, Sales & Marketing in the AI Industry, Other Topics in A.I.

The “soft dollars” question, that is, the issue of the arrangements by which the managers of other peoples’ and other institutions’ money might most appropriately pay for investment-related research, remains unresolved. Traditionally, the managers of investment funds, alternatives among them, could collect rebates from the trading fees charged them byRead More


Fiduciary Duty, Excessive Fees, and Findings of Fact  

Aug 30th, 2016 | Filed under: Newly Added, The A.I. Industry, Industry Size & Managers, Asset Managers, Regulatory Environment, Legislation/Court rulings

The Honorable Peter J. Sheridan, for the U.S. District Court for the District of New Jersey, ruled in favor of defendants, AXA Equitable and related entities, in a consolidated derivative action on behalf of mutual fund investors. This was a lengthy decision issued on August 25 that will reward attentionRead More


Sovereign Credit Swaps: Europe’s Sovereigns and Regime Changes

Aug 16th, 2016 | Filed under: Newly Added, The A.I. Industry, Asset allocation, Regulatory Environment, Credit Derivatives, Asset Allocation Models, Structured Credit Products, Structured Products, Allocating to A.I.

Andrea Consiglio and two of his colleagues have developed models for the management of risk in the sovereign credit swaps market, and they have successfully back tested these models against recent European history. Consiglio is a professor at the University of Palermo, in Italy. Sovereign CDS’ are contracts that offerRead More


AIMA on the Consequences of Brexit: Three Scenarios

Jul 5th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment

Among the questions that have acquired a great deal of urgency in recent days is: what will Brexit mean for MiFiD? Or for MAD? Or for the CMU? Britain has always been a major voice in the creation of these systems and directives within the EU. Where will hedge fundRead More


Centripetal versus Centrifugal Force: Fund Marketing in Europe

Jun 14th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment, Sales & Marketing in the AI Industry, UCITs, Other Topics in A.I.

On June 2, 2016 the EC issued a consultation document of interest to the many alpha seekers who would like to market their funds in one or more of the countries of the Eurozone. In a sense, its interest is much broader than that, because it fits into a veryRead More


The SEC: Still Fiddling with a 1940 Era Carburetor 

May 3rd, 2016 | Filed under: Newly Added, The A.I. Industry, Liquid Alternative Investiments, Alternative Mutual Funds, Regulatory, Regulatory Environment, Liquid Alts, Other Topics in A.I.

Steven A. Keen of Perkins Coie has posted an insightful discussion of section 18 of the Investment Company Act of 1940, and of the pending proposed regulation under that mandate, Rule 18f-4, on one of that firm’s blogs, the Derivatives & Repo Report. Both that proposal and Keen’s observations areRead More


Brexit and Derivatives: Allen & Overy’s Views

May 1st, 2016 | Filed under: Newly Added, The A.I. Industry, Due Diligence Process, Regulatory Environment, Risk Management & Operations

A decision by the United Kingdom to leave the European Union could be a bad thing for the derivatives markets. But from a legal standpoint there isn’t a lot that can be done about it in advance, and the existing Master Agreement for derivatives needs no change. Those are theRead More


The Impending Market Abuse Regulation (MAR) Mandates

Apr 10th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment

On July 3, 2016 the new Market Abuse Regulation comes into effect throughout Europe, pursuant to 2014 legislation. The member states have transposed the MAR into national law.  Stefan Hendrickx is the founder and executive Director of Ancoa, recently looked at the “race to the MAR deadline” from the point ofRead More


Proposed Reg AT: Comments Pile Up at the CFTC

Mar 22nd, 2016 | Filed under: Newly Added, Commodities, The A.I. Industry, Regulatory Environment, oil, Commodities, Commodities: Examples, Energy

The CFTC received a last-minute pile-up of comments on proposed rule 80 FR 78824, on automated trading. The commenters generally are not in a mood to pat the agency on its intangible back and congratulate it on a job well done. Quite the contrary. The notice of proposed rule-making (NPRM)Read More


Swaps Accounting: FVA as a Flawed Convention

Mar 15th, 2016 | Filed under: Newly Added, Hedge Fund Strategies, The A.I. Industry, Equity Hedge Funds, Regulatory, Regulatory Environment, Hedge Funds

Leif Anderson, co-head of the global quant group at Bank of America Merrill Lynch, and two co-authors have prepared a draft of a paper that appears to identify an important error in the conventions for adjustments that derivatives dealers make to the disclosed valuations of their swap books.  It soundsRead More


Federal Judge: Gingrich-Era Bars Not Easily Circumvented

Mar 3rd, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Legislation/Court rulings, Sales & Marketing in the AI Industry, Other Topics in A.I.

Lucy Koh, the US. District Court judge for the Northern District of California, has granted judgment for a defendant, Schwab Investments, in a much-watched case. Koh has short-circuited litigation in which plaintiffs sought recovery for the style drift that allegedly afflicted a number of Schwab entities as the globe headedRead More


Fiduciary Duty: Do Investors Know What It Means?

Feb 23rd, 2016 | Filed under: Newly Added, Retail Investing, The A.I. Industry, Regulatory Environment, High-net-worth investors, Institutional Asset Management, Family Offices, Other Topics in A.I.

According to a new Spectrem Group whitepaper, most investors questioned believed (usually erroneously) that their advisors have a fiduciary responsibility in caring for their money.Read More


KIDs Say the Darndest Things: Or, the Most Plain-Language Things

Feb 18th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment, UCITs

Those of us with some years on us may remember that Art Linklater, an avuncular broadcast personality of the 50s and 60s of the last century, popularized the expression “kids say the darndest things,” as a recurring segment on his television show. In Europe today the question might be whetherRead More


AIMA’s Guide to the Bamboo Bridge of Operations

Feb 15th, 2016 | Filed under: Newly Added, The A.I. Industry, Due Diligence Process, Regulatory Environment, Operations, Risk Management Strategies & Processes, Risk Management & Operations

How sturdy can a bamboo bridge be? The front page of a new Guide from The Alternative Investment Management Association consists of a photo of a bamboo bridge, apparently on a beach, as seen from below. That is, this is the view of someone on whom the bridge would fall,Read More


AIMA Suggests Third Method For Leverage Measurement

Feb 7th, 2016 | Filed under: Newly Added, Hedge Fund Regulation, The A.I. Industry, Regulatory Environment

At present, AIFMD allows for either a gross or a commitment method of measuring leverage. AIMA has suggested a third method. The Context The European Commission has issued a “call for evidence” on the EU regulatory framework for financial services. One of the comments the EC received on this subjectRead More


Challenges to Mergers: Not So Automatic Anymore?

Jan 31st, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Hedge Funds, Legislation/Court rulings, Relative Value Hedge Funds

The Delaware Court of Chancery has become increasingly hostile of late to lawsuits that challenge corporate mergers on fiduciary grounds. This is important, because the course of recent decades certain boilerplate sorts of lawsuits have become a regular feature of the mergers-and-acquisitions landscape in the U.S.  The law has allowedRead More


Insider Trading: Big-mouth Bankers and Remote Tippees

Jan 26th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory Environment, Legislation/Court rulings

The US Supreme Court has accepted an appeal from a Ninth Circuit decision on insider trading. Whatever the Justices do with this case, they will surely shed some light on the future of this sometimes very confusing body of law. Specifically: on January 19, the high court granted cert onRead More


Banks (PBs): Turning Cash Away

Jan 21st, 2016 | Filed under: Newly Added, Hedge Fund Regulation, The A.I. Industry, Regulatory Environment, Hedge Funds, Structure of the Hedge Funds Industry

The Alternative Investment Management Association and S3 Partners jointly sponsored a new survey and report on the consequences of the Basel III reforms on the alternative-investment world. Basel III, a voluntary set of banking-supervisory standards for capital adequacy, stress testing, and market liquidity, published in its final form by theRead More


How ‘Fair’ is New Chapter 11 Reform? New ABI Study Investigates

Jan 14th, 2016 | Filed under: Newly Added, The A.I. Industry, Equity Hedge Funds, Alpha Strategies, Regulatory, Regulatory Environment, Hedge Funds, Event-Driven Hedge Funds

By Konstantin Danilov, CFA Even though the rate of public company bankruptcies is at an all-time low, there has recently been lots of discussion regarding proposed chapter 11 reform.  If enacted, some of these proposals may have interesting implications for distressed debt investors in the future. Proposed Reforms and ResponseRead More


The SEC Staff Proposal on ‘Accredited Investor’: Index Thresholds for Inflation, Create Grandfathers

Jan 7th, 2016 | Filed under: Newly Added, The A.I. Industry, Regulatory, Regulatory Environment

Indexation would of course tend to contract the number of accredited investors. But other staff recommendations would have the opposite consequence, expanding the number, especially by allowing investors to qualify “based on other measures of sophistication” such as professional credentials, or the successful completion of an examination. Read More


Top Alpha Stories of 2015: Nerds Win Three, Lose Two

Dec 29th, 2015 | Filed under: Newly Added, The A.I. Industry, Industry Size & Managers, Investing in Commodities, Regulatory, Regulatory Environment, Commodities, Structure of the Hedge Funds Industry

We offer our annual review of the five top Alpha stories of the year ending, in the course of which we mention that these are exciting times in the world of basic biological/medical research. They’ve been exciting at least since the completion of the map of the human genome in 2003, when attention turned to what can be done with that map. Read More


Attack of the Activists: October Setback for NexPoint Still a Setback in November

Dec 3rd, 2015 | Filed under: Newly Added, Regulatory Environment, Legislation/Court rulings

A district court judge in Connecticut now says that upon further consideration “the Court should take Maryland law into account in determining whether NexPoint has made a sufficient showing to obtain a preliminary mandatory injunction.”Read More


GFT Embraces the ‘Dawn’ of FRTB Requirements

Nov 18th, 2015 | Filed under: Regulatory, Regulatory Environment

The Basel Committee is engaged in a Fundamental Review of the Trading Book. Nothing has been finalized yet, but a new report from GFT Group suggests that the outlines of a new regulatory system for banks and their trading books is taking shape. And GFT is enthusiastic about this.Read More


M&A: Are the Delaware Courts Becoming Intrusive?

Nov 8th, 2015 | Filed under: Regulatory Environment, Legislation/Court rulings, Relative Value Hedge Funds

In 2014 it seemed possible that investment bankers could shrug off the Rural Metro decision as an anomaly; that is, as an example of how bad cases make bad law. But if a pending decision in the Supreme Court upholds the Chancery Court, they'll know they're dealing not with an anomaly but with a trend.Read More


Looking a ‘Gift’ Horse in the Mouth: The Latest on Section 363

Oct 22nd, 2015 | Filed under: Regulatory, Insolvency, Regulatory Environment, Business News

Something that may look a bit like a "gift plan" in the prohibited sense may turn out to be permissible under section 363 after all, according to a recent ICL decision written by Judge Thomas Ambro, in a precedent that will matter to anyone pursuing a distressed-assets strategy. Read More