Hedgeline
WELCOME to the second edition of HEDGELINE - a publication by FSI dedicated exclusively to hedge fund regulation. Each month we will provide a summary of the major legal and regulatory developments in hedge fund regulation, both in Europe and key offshore jurisdictions. For those who want to read in more depth, we have also provided links to all relevant materials currently available.
In this month's update:
- HMRC issues new tax guidance for hedge funds
- Court denies Cayman funds bankrupcy protection
- OECD report says hedge funds can play a positive role in corporate governance
- South Africa regulator introduces stricter rules for hedge fund managers
HMRC issues new tax guidance for hedge funds
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- Revised statement of practice ensures offshore funds remain not liable for UK tax
- Investment transactions within scope increased
- New guidance on “Customary Remuneration”
- Takes immediate effect
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Following a wide-ranging consultation, HM Revenue & Customs has updated its guidance on the investment manager exemption (IME). The IME is an important feature of the UK hedge fund industry as it enables offshore funds with UK-based managers to be exempt from UK tax. More...
U.S. court denies Cayman funds bankruptcy protection
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- U.S. judge denies Cayman-registered funds bankruptcy protection under Chapter 15
- Offshore status may not protect Cayman funds from U.S. litigation
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A U.S. bankruptcy judge last month ruled that two Bear Stearns hedge funds incorporated in the Cayman Islands could not be granted bankruptcy protection, known as Chapter 15. A recently introduced rule, Chapter 15 of the U.S. Bankruptcy Code requires the U.S. courts to cooperate with foreign jurisdictions in cross border insolvencies. Without protection under Chapter 15, the funds remain liable to lawsuits from U.S. creditors.
More...
OECD says hedge funds can play a positive role in corporate governance
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- Activist hedge funds may improve corporate governance
- Separate hedge fund code not necessary
- But shortcomings remain in areas such as integrity of voting systems, transparency and conflicts of interest
- OECD favors greater transparency and disclosure of shareholdings
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A recently published OECD report says that activist hedge funds may be a spur to better corporate governance. In an 82 page report “The Implications of Alternative Investment Vehicles for Corporate Governance” the OECD Steering Group on Corporate Governance argues that in some cases activist hedge funds can help strengthen corporate governance by encouraging more investors to make active use of their shareholder rights. More...
South africa regulator introduces stricter rules for hedge fund managers
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- New “Fit and Proper” requirements for hedge fund managers
- Rules come into effect February 2008
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South Africa’s Financial Services Board (FSB) has published new rules for licensing of hedge fund managers. The rules amend the existing Financial Advisers and Intermediary Services Act to create a special category for hedge fund managers, and require anyone managing a hedge fund to apply for a new licence by February 2008. More...
ABOUT YOUR PUBLISHER, FSI:
FSI is a well known law firm with specialist expertise in relation to enquiries and investigations instigated by the FSA and overseas regulators, including AMF in France and the SEC in the US. Often working in conjunction with compliance specialists and other professional advisers, the team will attend interviews at the FSA, advise on all correspondence with the FSA and represent their clients before the Regulatory Decisions Committee and the Financial Services Markets Tribunal. For further information on how we might be able to help you, please contact head of team, Philip Rubens:
Philip Rubens is head of the financial services team at FSI. Having undertaken a secondment at the FSA, Philip is a leading expert in the regulatory enforcement field.