IOSCO Risk Check

IOSCO Risk Check

International Regulator Requiring Data from Hedge Funds

Hedge funds are facing their first global risk test from an international monitor.  The International Organisation of Securities Commissions is requiring that hedge funds operating within its sphere submit eleven sets of data by the end of September.  Hedge funds will have to show how much leverage they are using and the value of their long and short bets among other details.  
"The next step for us is going to be is coordinating a survey of hedge funds using this template so we can try to get a global picture for the first time on the state of the hedge funds industry and then analyse that data from a systemic perspective," IOSCO Secretary General Greg Tanzer told the Reuters Regulation Summit.
Policymakers say the sector is too opaque and not regulated enough though many regulators agree the sector was not a fundamental cause of the crisis and no fund needed a public bailout like many banks.
The G20 group of leading countries agreed last year that hedge funds should be made to register, be supervised directly and submit data regularly to the authorities.
The hope is to learn from the crisis so that excessive risks building up in the financial system are spotted early enough for regulators, central banks and governments to take speedy action.  Source

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