New Hedge Fund Rules to Prevent Secrecy

(February 26, 2010) — The International Organization of Securities Commissions (IOSCO) published  a list of 11 types of data hedge funds will need to disclose as of September.

“IOSCO believes that regulators should seek to develop a comparable and consistent set of data to be collected from local hedge fund managers and advisers to monitor systemic risks and prevent gaps in regulatory reporting requirements,” said Chairman of the Technical Committee Kathleen Casey in a news release.

The Telegraph reported that the template has encountered surprisingly little objection in London. Hedge funds told The Telegraph that the British Financial Services Authority was influential in forming the new rules, which they found preferable to the controversial regulations proposed by the European Union.

Under IOSCO’s new rules, hedge funds will need to provide:

• General manager and adviser information (e.g. registered names and addresses of all employees)
•  Key service providers, such as prime brokers, auditors and fund valuers
•  Performance and investor information related to covered funds
•  Assets under management
•  Gross and net product exposure and asset class concentration
•  Gross and net geographic exposure
•  Trading and turnover issues
•  Asset / liability issues
•  Burrowing
•  Risk issues
•  Credit counterparty exposure