The International Organisation of
Securities Commissions has released a template for the global collection of
hedge fund information by regulators.
The aim is to provide regulators
with consistent data that could help identify any systemic risks stemming from
The template is designed to ensure
the comparability of data collected by different national regulators or
supervisory authorities. The gathered information will be analysed by IOSCO’s
technical committee that comprises the US Stock Exchange Commission, the UK Financial
Services Authority and 16 other financial regulatory authorities.
The IOSCO template suggests that
hedge funds should report operational details including the number of funds a
management company operates, key service providers and where it is based. In
addition the hedge funds will be required to outline material holdings in a
number of asset classes, such as long and short positions in equities, bonds or
Other data will include geographic
exposure, investor types, subscriptions, redemptions, liquidity and the use of
side pockets and gates.
In addition the value of borrowings
and other risk information such as credit counterparty exposures should be
revealed. In total there are 11 proposed categories of information.
“We recognise that the
legislative process is ongoing in many jurisdictions and their outcomes could
further influence the information needed to monitor systemic risk in the hedge
fund sector, as well as who collects the data,” said technical committee chair
“Nonetheless, setting out these
categories of information may help regulators in the assessment of systemic
risk and help to inform the relevant legislative debates.”
The template was developed by the
Task Force on Unregulated Entities following requests from the Financial
Stability Board and IOSCO members.
The information will be collected
twice a year, starting in September 2010, IOSCO announced.
Meanwhile the Financial Services
Authority in the UK has published two surveys providing a view of the leverage
positions of large UK-registered hedge funds and other possible systemic risk
The surveys found little to no indication of
systemic risk caused by hedge funds.
Alternative Investment Management Association welcomed the findings of the
survey. Andrew Baker, AIMA’s chief executive officer, commented: ”These striking conclusions from the lead regulator for the industry
in Europe are of clear relevance to the on-going debate about the Alternative
Investment Fund Managers Directive in Europe.
“If the industry does not pose a
systemic risk and features relatively low levels of leverage then additional
regulation should not be disproportionate and punitive,” Mr. Baker argued.