Browsing: Regulatory Environment

Hedge fund regulation, UCITS, Court Rulings, Regulatory developments

Regulatory Environment

EC and US CFTC Reach Agreement on Venues

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

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: Fees, Industry Size & Managers, Newly Added, Regulatory, Regulatory Environment

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: Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Regulatory Environment, The A.I. Industry

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: Hedge Fund Regulation, Industry Size & Managers, Newly Added, Regulatory Environment, The A.I. Industry

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: Finance & Economics, Liquid Alternative Investiments, Liquid Alts, Macroeconomics, Newly Added, Other Topics in A.I., Regulatory Environment, The A.I. Industry, The Global Economy & Currencies

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: Allocating to A.I., Endowments & Foundations, Institutional Asset Management, Newly Added, Regulatory Environment, The A.I. Industry

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: Allocating to A.I., Institutional Asset Management, Institutional Investing, Legislation/Court rulings, Newly Added, Regulatory Environment, The A.I. Industry

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: Equity Hedge Funds, Hedge Funds, Newly Added, Regulatory Environment, The A.I. Industry

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: Algorithmic and high-frequency trading, Business News, Finance & Economics, Newly Added, Regulatory Environment, The A.I. Industry

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: Investor Relations, Newly Added, Other Topics in A.I., Regulatory Environment, Sales & Marketing in the AI Industry, The A.I. Industry

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: Asset Managers, Industry Size & Managers, Legislation/Court rulings, Newly Added, Regulatory Environment, The A.I. Industry

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: Allocating to A.I., Asset allocation, Asset Allocation Models, Credit Derivatives, Newly Added, Regulatory Environment, Structured Credit Products, Structured Products, The A.I. Industry

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, Regulatory, Regulatory Environment, The A.I. Industry

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, Other Topics in A.I., Regulatory, Regulatory Environment, Sales & Marketing in the AI Industry, The A.I. Industry, UCITs

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: Alternative Mutual Funds, Liquid Alternative Investiments, Liquid Alts, Newly Added, Other Topics in A.I., Regulatory, Regulatory Environment, The A.I. Industry

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: Due Diligence Process, Newly Added, Regulatory Environment, Risk Management & Operations, The A.I. Industry

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, Regulatory, Regulatory Environment, The A.I. Industry

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: Commodities, Commodities, Commodities: Examples, Energy, Newly Added, oil, Regulatory Environment, The A.I. Industry

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: Equity Hedge Funds, Hedge Fund Strategies, Hedge Funds, Newly Added, Regulatory, Regulatory Environment, The A.I. Industry

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: Legislation/Court rulings, Newly Added, Other Topics in A.I., Regulatory Environment, Sales & Marketing in the AI Industry, The A.I. Industry

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: Family Offices, High-net-worth investors, Institutional Asset Management, Newly Added, Other Topics in A.I., Regulatory Environment, Retail Investing, The A.I. Industry

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, Regulatory, Regulatory Environment, The A.I. Industry, 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: Due Diligence Process, Newly Added, Operations, Regulatory Environment, Risk Management & Operations, Risk Management Strategies & Processes, The A.I. Industry

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: Hedge Fund Regulation, Newly Added, Regulatory Environment, The A.I. Industry

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: Hedge Funds, Legislation/Court rulings, Newly Added, Regulatory Environment, Relative Value Hedge Funds, The A.I. Industry

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: Legislation/Court rulings, Newly Added, Regulatory Environment, The A.I. Industry

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: Hedge Fund Regulation, Hedge Funds, Newly Added, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. 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: Alpha Strategies, Equity Hedge Funds, Event-Driven Hedge Funds, Hedge Funds, Newly Added, Regulatory, Regulatory Environment, The A.I. Industry

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, Regulatory, Regulatory Environment, The A.I. Industry

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: Commodities, Industry Size & Managers, Investing in Commodities, Newly Added, Regulatory, Regulatory Environment, Structure of the Hedge Funds Industry, The A.I. 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: Legislation/Court rulings, Newly Added, Regulatory Environment

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: Legislation/Court rulings, Regulatory Environment, 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: Business News, Insolvency, Regulatory, Regulatory Environment

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


Accounting for the Unreported Dead: A Matter of Opinion

Oct 20th, 2015 | Filed under: Legislation/Court rulings, Regulatory Environment

The Supreme Court announced this March that opinions that turn out to be wrong aren't enough to make out a claim for securities fraud. The twist in the Westland case was that it turned on the proper accounting treatment of reserves for death benefits that have been incurred but not reported. Read More


Is it my imagination, or is the U.S. SEC cracking down on fund managers? (Video)

Oct 19th, 2015 | Filed under: Hedge Funds, Regulatory

Since the financial crises of 2008-09, regulation of financial firms has increased significantly. Recently the SEC has stepped up its enforcement actions and commensurate fines. What does this mean for managers and the cost of generating alpha?Read More


Merger Arb: News from Delaware’s Chancery Court

Oct 13th, 2015 | Filed under: Hedge Funds, Regulatory, Relative Value Hedge Funds

The court in Delaware clearly doesn’t believe that eliciting certain undramatic tidbits of news as supplemental disclosures is enough to earn plaintiffs’ attorneys their fees. Vice Chancellor Laster in particular has, in his own words, “been giving these [cases] a hard look for a while now,” and with Aruba the court puts its foot down. Read More


Is the FTC loosening its choke-hold on the mergers?

Oct 8th, 2015 | Filed under: Business News, Regulatory, Regulatory Environment

After a hard look at the evidence, Judge Polster couldn't say that the FTC was likely to prevail after a full hearing on its objection to the merger of two medical-equipment sterilizers, so he denied the preliminary injunction. Why this matters. Read More


New Mutual-Fund Industry Whistle Blower Case

Sep 28th, 2015 | Filed under: Business News, Regulatory Environment

We will certainly hear more of this whistle blower case, because it isn’t at all clear whether there is majority support on the U.S. Supreme Court for the interpretation of Lawson in which the district court is engaged in Anthony. Read More


The Taxation of Carried Interest: A New Republican Idea

Sep 20th, 2015 | Filed under: Business News, Regulatory Environment

When Tapper brought the hedge fund taxation question directly to Mr. Trump, Trump replied that he was still working on the details, but that when his full plan is released "the hedge fund guys won't like me as much as they like me right now." Why that is the perfect Trumpian sentence. Read More


A Curtain Opener for the Australia Forum

Sep 13th, 2015 | Filed under: Alternative Beta & Hedge Fund Replication, Hedge Fund Regulation, Performance, Analytics & Metrics

Paul Chadwick, chairman of AIMA Australia, says that the hedge fund industry in Australia is at an "inflection point." Faille reflects on that ubiquitous expression, and then turns to Australia's new Investment Manager Regime. Read More


Supreme Court Decisions: Post-Announcement Hours & Days

Sep 10th, 2015 | Filed under: Alpha Hunters, Alpha Seekers, Alpha Strategies, CAPM / Alpha Theory, Hedge Fund Strategies, Legislation/Court rulings

Presumably the U.S. Supreme Court's decision, in December 2008, that states can in fact make and enforce tougher labeling standards for cigarettes than does the federal government was a negative for tobacco stocks. But did that mean that stock prices had already anticipated the decision before it happened? or that they immediately adjusted downward on the morning the decision was announced? Or ... neither of those? Read More


Javert Frustrated Again: This Time in the Second Circuit

Sep 8th, 2015 | Filed under: Emerging markets, Insolvency, Legislation/Court rulings

NML tried to get around the sovereign immunity of Argentina's Central Bank by arguing that it and the Republic were only one entity (the "alter ego" theory developed by the U.S. Supreme Court in an opinion concerning Cuba, in the 1980s), and that the one entity involved has waived its/their immunity. No dice. Read More


The Enablers of the Fraudsters, Part I

Sep 1st, 2015 | Filed under: Insolvency, Regulatory

A new lawsuit against the corporate and individual enablers of a securities fraudster moves forward. The former are "alleged" enablers, but the latter is a convicted fraudster, already serving his time. Faille seeks to draw lessons. Part One of Two. Read More


Administration, via Verrelli, Rolls the Dice on Insider Trading Issue

Aug 31st, 2015 | Filed under: Alpha Hunters, Hedge Fund Strategies, Legislation/Court rulings

Not all benefits are as tangible as a suitcase of cash, and the question of law for the Second Circuit, for the Ninth, and now perhaps for SCOTUS is: is friendship enough? how about regard for one's brother? Read More


When Underfunded Pension Funds Take Up Social Responsibility Investing

Aug 24th, 2015 | Filed under: Institutional Investing, Legislation/Court rulings, Socially responsible investing

In November 2014, Scott Stringer, New York City's Comptroller, launched a campaign he called the Boardroom Accountability Project. Bernard Sharfman makes a case that this BAP is a good example of much that is wrong with institutional/activist investing today. Read More


Weintraub of GFT: Basel III Coming Into Force by Increments

Aug 20th, 2015 | Filed under: Asset allocation, Hedge Fund Industry Trends, Regulatory, Risk management

Faille spoke recently to Herman Weintraub, executive director and head of alternative investment practices at GFT, about the impact of the Basel III rule changes upon the HF industry. Weintraub says, one ought to look not at the parts, but at the whole. Read More


SEC’s Daniel Gallagher: Friend of the Beleaguered CCO

Aug 10th, 2015 | Filed under: Hedge Fund Regulation, Regulatory, Risk management

Commissioner Gallagher contends that some recent enforcement actions "have unfairly contorted the rule to treat the compliance function as a new business line," thus giving compliance officers the unwelcome role of business heads. In this and other respects, Gallagher says the agency is setting up a perverse system of incentives for those who ought to be its allies, the CCOs of IAs. Read More


Fractal Ambiguity in the AIFMD Passport Status of the U.S.

Aug 6th, 2015 | Filed under: Regulatory

What does the road to passport status look like for the US, regarding Europe's AIFMD? It looks rocky, and ESMA seems disinclined to draw a legible map. Instead it offers ambiguity and links to further ambiguity in the footnotes of its report.Read More