Browsing: Hedge Fund Regulation

Hedge Fund Regulation

Thoughts on the European Regulation on Short Selling

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

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

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

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

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

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

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

MMIF Reporting: An Ongoing Challenge for Fund Administrators

Aug 5th, 2015 | Filed under: Due Diligence Process, Hedge Fund Industry Trends, Hedge Fund Regulation, UCITs

Guest columnist Shane Brett discusses a new RR Donnelley survey on the MMIF challenges facing fund administrators.Read More

Side Letters and the Caymans: The Latest

Jun 2nd, 2015 | Filed under: Alpha Strategies, Hedge Fund Regulation, Insolvency, Legislation/Court rulings

This Lancelot's adventures came to a bad end: defeated by the dragon of insolvency. But its official liquidator did win a victory over an investor seeking special treatment via a side letter.Read More

Exemptions and Pools: CFTC Harmonizes with the JOBS Act

Sep 17th, 2014 | Filed under: Commodities, Hedge Fund Regulation

Two rules within the CFTC rulebook that offer exemptions for certain CPOs from certain regulatory requirements mirrored the original pre-JOBS Act Reg D on the SEC side. But of course we are now in a post-JOBS Act world, and the CFTC staff has now acted, not through a rule change but by staff letter, to harmonize with its sister agency and with the JOBS Act mandate. Read More

A Far-sighted View: Fund Alignment Rights Are Wave of the Future

Jun 12th, 2014 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Fund Regulation, Hedge Fund Strategies

Guest columnist Rick Ehrhart looks at hedge fund incentive compensation.Read More

Bondholder v. Sovereign: An Empirical Analysis

Jan 9th, 2013 | Filed under: Hedge Fund Regulation

In 1992 the Supreme Court ruled that the issuance of bonds is itself a commercial activity, thus bond defaults by sovereigns are clearly subject to litigation in U.S. courts. One of the more intuitive findings of the authors of a new empirical study of such lawsuits is that the identity of the characteristic plaintiffs has changed over time. Read More

Hedge Funds and Their World: Slow Recovery Ahead

Sep 25th, 2012 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation

Markets are bullish on the United States in particular, though this is so only with some obvious qualifications: they don’t expect that a go-go climate will return any time soon, but they do expect a slow-and-real recovery. Likewise, markets are modestly bullish on at least the north of Europe.Read More

Dear SEC: Comments on the JOBS Act

Jul 19th, 2012 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation, Private Equity, Real Estate, Regulatory

A veteran of hedge funds and private equity, Jeff Joseph offers some comments to the U.S. Securities and Exchange Commission on the JOBS Act and what this legislation has the potential to mean to the global alternative investment community.Read More

Sound Alternatives Practices in the Great White North

May 29th, 2012 | Filed under: Hedge Fund Regulation

The meat of the guide addresses what AIMA Canada considers sound practice in marketing and promotion, such as in the calculation and presentation of returns, in selecting a benchmark relevant to a specific strategy, and in explaining the various ratios used for the same purpose. It notes that the Association for Investment Management and Research’s Performance Presentation Standards (AIMR-PPS) recommend using a time-weighted method for the calculation of returns, a model otherwise known as the Modified Dietz method.Read More

Simplifying the JOBS Act for Alternative Investment Vehicles

May 10th, 2012 | Filed under: Hedge Fund Regulation

By Ron S. Geffner, Partner, Head of Financial Services, Sadis & Goldberg LLP On April 5, 2012, President Obama signed the Jumpstart Our Business Startups Act, H.R. 3606 (“JOBS Act“). The JOBS Act requires the Securities & Exchange Commission (“SEC“) to revise existing rules to implement many of the provisionsRead More

The Brand of Hedge Funds

Apr 26th, 2012 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation

"This industry will perhaps never really shake off the aura of secrecy and inevitable rumor mill, but investors and risk managers need to really start to judge funds on the metric against which the funds judge themselves: performance."Read More

A Battle Cry for Hedge Funds—Separate but not Equal

Apr 12th, 2012 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation

Diane Harrison examines the state of the hedge fund industry and regulation.Read More

Catastrophism Versus Darwinism: Dodd-Frank as Climate Change

Mar 14th, 2012 | Filed under: Alpha Strategies, Commodities, CTA, Hedge Fund Industry Trends, Hedge Fund Regulation, Hedge Fund Strategies, Private Equity, Retail Investing

The Grant Thornton paper maintains that the asset management industry achieved "performance and operational efficiencies" during 2011, and this sounds like the sort of marginal adaptation that play a large part in Charles Darwins' writings, to which GT's Winstoin Wilson alluded. But ... the report also treats the regulatory environment as a meteor, capable of wiping out even the best-adapted of pre-collision dinosaurs. So "the Darwinian process" is an odd label for what it describes. Read More

Algo Trading: Life in the Cross-Hairs

Mar 8th, 2012 | Filed under: Algorithmic and high-frequency trading, Hedge Fund Regulation

Three lawyers with Covington & Burlington write about the new intensified scrutiny to which regulators are subjecting algorihtmic and high frequency trading. They place it in the context of an old dispute over what constitutes market manipulation. According to the broadest view, if a trader's 'sole intent' in making even a quite ordinary buy or sell order is to move the price, then the resulting trade is market manipulation.Read More

Final CFTC Rule Limits Registration Exemptions for Commodity Pools

Mar 6th, 2012 | Filed under: Commodities, CTA, Hedge Fund Regulation

With the enactment of the Dodd-Frank Act (more formally the Wall Street Reform and Consumer Protection Act) in 2010, Congress demanded change. It did not specifically demand changes in the rules relating to CPOs, but it did demand that the SEC change certain rules regarding hedge fund advisors, and the CFTC has decided that a reconsideration of the CPO rules is “consistent with the tenor of the provisions” of that act because the “sources of risk delineated in the Dodd-Frank Act with respect to private funds are also presented by commodity pools.”Read More

Fine Print As Yet Unwritten, But the Gist is Clear for OTC Derivatives

Oct 4th, 2011 | Filed under: Alpha Strategies, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation

Clearing within ten days after the transaction (T+10) was once the norm, though it now seems archaic. Clearing overnight or in a once-a-day cycle will in the years ahead become equally unsatisfactory. It may soon “become standard practice for risk managers and eventually traders to demand proof that their trades have been cleared mere seconds after execution.”Read More

Will the Babble of Many Taxes Scupper Hopes for Merger Mania and Cost Cutting under UCITS 4?

Aug 30th, 2011 | Filed under: Fees, Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Hedge Fund Regulation, UCITs

There are high hopes that the new UCITS framework that took effect in July could herald rationalisation amongst Europe’s regulated hedge funds. While tax factors could slow down the process, UCITS has plenty of other growth drivers besides cost savings.Read More

Court Decision May Muddy Activist Alpha Seekers’ Strategies

Aug 1st, 2011 | Filed under: Hedge Fund Regulation, Performance, Analytics & Metrics

As if there wasn't enough confusion in the roiling U.S. capital markets and regulatory environment, the U.S. Second Circuit Court has issued a decision that will make alpha that more elusive for hedge funds involved in shareholder activism. Read More

Learning to swim in alpha-bet soup

Jun 14th, 2011 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation, Institutional Investing

There's nothing like a good list of acronyms to confuse even the most immersed hedge fund aficionado. A new report by KPMG and RBC Dexia unintentionally takes the industry's affinity for acronyms up a notch. Read More

Study finds “tantalizing insight into how hedge funds funds generate alpha.” And it’s not how you think…

May 26th, 2011 | Filed under: Hedge Fund Regulation

After being castigated in 2003 for their cozy relationship with their i-banking brethren, equity research departments are now accused of being in cahoots with the hedge fund community.Read More

Fiduciary Alpha

Apr 12th, 2011 | Filed under: Hedge Fund Regulation

Fiduciaries think of a client's needs before their own - sacrificing the latter if required. But does the requirement for a hedge fund manager to put their client's interests before their own help or hinder the search for alpha? It depends on who you ask.Read More

A funny thing happened on the way to the Directive…

Apr 10th, 2011 | Filed under: Hedge Fund Regulation

A funny thing happened on the way to blaming hedge funds for the global financial crisis, formulating a new set of rules to monitor them, politically compromising and scaling back on those rules and then slamming them through. Read More

Could the latest twist in the Goldstein case help shine “disinfecting sunlight” on hedge funds?

Jan 17th, 2011 | Filed under: Hedge Fund Regulation

Hedge fund crusader Phil Goldstein is back in court appealing a verdict that he says is unconstitutional. But this time around, the opinions of a small group of journalists, academics and students could have a profound and lasting impact on the way hedge funds communicate with the outside world.Read More

“Regulatory Induced Performance Persistence”

Dec 14th, 2010 | Filed under: Hedge Fund Regulation

Yes. You read it right. Regulations that could actually lead to more alpha? Hey, it can happen.Read More

The SEC’s new hedge fund rule: Opening a can of worms, then kicking it down the road

Dec 5th, 2010 | Filed under: Hedge Fund Regulation

The SEC's attempt to regulate hedge funds in 2005 hinged on the definition of "client." By avoiding that question in 2010, its newest kick at the can seems likely to allow the issue to fester even longer. As a result, a University of Washington law professor ponders the question of to whom, exactly, a hedge fund adviser owes its fiduciary duty.Read More

Insider Traders: Rogues or Whistleblowers?

Nov 28th, 2010 | Filed under: Hedge Fund Regulation

It's easy to see why investors find insider trading morally objectionable. But if market prices are a critical form of information transmission, then does "some" insider trading actually help society? And if it does, then what kinds of insider trading?Read More

Gaming the Good Housekeeping Seal of Approval

Oct 14th, 2010 | Filed under: Hedge Fund Regulation

As UCITS-compliant hedge funds become increasingly popular among funds of hedge funds in particular there is growing concern that underlying managers may be bending the rules to get the UCITS seal of approval.Read More

Good, bad or inevitable: Changes are a comin’ to the securities lending club

Oct 5th, 2010 | Filed under: Hedge Fund Industry Trends, Hedge Fund Regulation

With the practice of securities lending likely to undergo substantial regulatory change, a recently published paper argues that "CCPs", already being adopted, are the best way forward. Read More

Report: Median performance fee earned by UK mutual funds that have one is, well, not really an issue

Aug 29th, 2010 | Filed under: Fees, Hedge Fund Regulation

A new report by Lipper examines the early impacts of the UK's endorsement of performance fees for mutual funds.Read More

SEC to Hedge funds: No need to use “plain English”

Aug 17th, 2010 | Filed under: Hedge Fund Regulation

A recent SEC ruling requires investment advisers to use "plain English" when communicating with clients. But for now, hedge funds can keep confusing people... Read More

Do hedge funds always supply liquidity to markets? Or do they also drink it up?

Jun 29th, 2010 | Filed under: Hedge Fund Regulation

As policymakers debate the value of hedge funds as liquidity providers, they should take note of this recent academic paper.Read More

European Fund Regulations: Fad or new de facto global standard?

May 31st, 2010 | Filed under: Hedge Fund Regulation

There have been a lot of surveys on Europe's latest fashion trend: UCITSIII. Today, a guest author reports on some actual hard data on the topic. Read More

Hedge funds: Wrap it up UCITS and put a bow on top

May 20th, 2010 | Filed under: Hedge Fund Regulation, UCITs

Panacea, cure-all, the ultimate fix for liquidity, transparency and due diligence issues - whatever you want to call it, UCITS-wrapped hedge funds appear here to stay. Read More

By the way, is there anybody on board who knows how to fly a plane?

May 17th, 2010 | Filed under: Hedge Fund Regulation

An update on a study of the infamous 2008 short-selling bans pins the blame squarely on regulators for inadvertently making a bad situation worse.Read More

UCITS and NEWCITS: A better mousetrap?

Apr 22nd, 2010 | Filed under: Hedge Fund Regulation, UCITs

UCITS-structured hedge funds continue to be the trend du jour for 2010, but the jury is still out on whether they are the best route to delivering liquidity, transparency and compliance.Read More