WEST PALM BEACH, FL (HEDGECO.NET) – The South African Regulatory Authority, The Financial Services Board [FSB] sent out notices to investment managers in the country warning them to cease operationsuntil further notice. Such letter warned fund managers to stop marketing and managing hedge funds until the agency makes clarifications on such issue. The notices caused a near panic condition asfund managers sought additional information on the matter.

In a latest move, Gery Anderson, the deputy executive officer at FSB along with Kevin Shames, the Chairman of Alternative Investment Management Association explained that hedge funds in South Africa may continue to operate as usual until new hedge fund rules are issued, such matter would go through a �consultative process�, according to the authorities.

Anderson said, “We are liaising with the industry representatives on this issue and I am willing to spend a lot of time on this.� According to Anderson�s statement, the letter was aimed at preventing fund managers from claiming that they have been approved by the FSB to sell hedge funds, simply because they were approved investment managers. Anderson added, �Approval as an investment manager does not include the right to sell or manage hedge funds,” he said.

Hedge funds in South Africa use similar strategies as other hedge funds in different parts of the world for trading. They are also unregulated, or at best loosely regulated, several issues remain unsettled about the participation of Life Insurance Companies in offering and marketing hedge funds. There is also the issue of whether fund managers may sell hedge funds to individuals or pension groups prior to a determination of such matter by the FSB. The South African hedge fund industry currently manages about US$147 million.

Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@Hedgeco.net

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