Hedgeline
WELCOME to HEDGELINE - a publication 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:
- FSA to assess hedge funds for market abuse controls
- U.K. hedge funds publish draft code of conduct
- U.S. investors launch flood of lawsuits in wake of subprime losses
- Malta launches new rules for professional investor funds
FSA to assess hedge funds for market abuse controls
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- FSA attacks 'complacent' attitudes towards market abuse found at some hedge funds
- Announces programme of visits to hedgefund managers
- Recommends specific measures for managing market abuse risks
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In a clear warning to the industry, the FSA’s markets division announced last month it would be launching a programme of visits to hedge funds to “formally assess” their market abuse controls. Revealing its plans in a newsletter, the FSA said its first impressions of hedge funds’ compliance regimes were very mixed: whereas some had a “high level of awareness and compliance controls in place,” others were “less aware” and “demonstrated a complacent attitude. Overall, it described itself as “disappointed” by some of the practices it saw. More...
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U.K. hedge funds publish draft code of conduct
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- Voluntary code to operate on 'comply or explain' basis
- Hedge funds should all make more information available on website
- Recommends all investors should be required to declare interests held through derivatives
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The Hedge Fund Working Group (HFWG), which represents 14 U.K. leading hedge fund managers, has published proposals for a new code of conduct. The new rules, which would be voluntary, would operate under a so-called ‘comply or explain’ regime meaning that the standards must be adhered to unless a ‘reasonable’ explanation could be given for an exception to be allowed. Although lacking any statutory basis, the HFWG argues that the new standards would be followed because of peer pressure and market pressure from investors. It recommends a ‘statement of conformity’ be published on a fund’s website to enable investors to see how the fund has complied with the standards. More...
U.S investors launch flood of lawsuits in wake of subprime losses
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- U.S. investors target lawsuits at subprime lenders
- More hedge funds may be in firing line
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Following catastrophic losses in the subprime market, in the past few months at least a dozen U.S. securities lawsuits have been launched against subprime lenders. Last month, Merrill Lynch joined the list when it was hit with a claim led by U.S. class action law firms Coughlin Stoia Geller Rudman & Robbins, and Abraham Fruchter & Twersky. More...
Malta launches new rules for professional investor funds
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- New 'Extraordinary investor' fund for investors with $1 million
- Fast track approval - within three business days
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Malta, one of Europe’s emerging hedge fund domiciles, has launched new rules for professional investor funds (PIFs) following a consultation earlier this year. The Investment Services Rules for Professional Investor Funds, which came into force on 1 November, provide for three classes of Funds: Experienced Investor Funds, Qualifying Investor Funds and a new category of Extraordinary Investor Funds. The ‘Extraordinary Investor’ regime is an offshoot of the existing PIF regime but subject to lighter regulatory requirements than those applicable to PIFs. More...
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Want to catch up on a previous edition of Hedgeline? Click on the links below
Hedgeline August
Hedgeline September
Hedgeline October