HedgeCo.net – E.U. Finance Ministers are planning to push for more oversight of hedge funds at this week’s Group of 7 meeting in Berlin, the G7 has welcomed the contribution of hedge funds to marketliquidity but still see investor protection as an issue.

Industry-led measures could include reporting trades to watchdogs to stamp out possible market abuse. The Alternative Investment Management Association, a global lobby, said a voluntary code was acceptable in principle, but how it would be enforced was unclear.

Ministers meeting this weekend will look at whether “enhanced international cooperation on the regulatory response should be pursued”, according to a background document. They also plan to discuss intervention in takeover battles such as the recent hedge fund fight over Dutch bank ABN AMRO.

The document says that action of some sort is needed “given that the influence of hedge funds on the efficiency and stability of the financial system has grown substantially”. Hedge fund managers are also accountable to regulators even though most funds are registered offshore such as in the Cayman Islands.

The G7 is comprised of official representatives from Britain, Canada, France, Germany, Italy, Japan, and the United States. The group released their conclusion last month that the world’s major developed economies show solid growth, but foreign exchange fluctuations, the rising power of hedge funds and dwindling energy supplies are a concern.

Alex Akesson
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net