WEST PALM BEACH, FL (www.hedgeco.net) -ATM, the financial market watchdog for the Netherlands said it is worried over the lack of transparency of hedge funds. While the industry regulator stopped short of introducing new regulations for hedge funds operating in the country, it however left impressions that some type of additional oversight of the hedge fund industry may be in the works.
AFM said in a released report, “Hedge funds give little or no historic or future information about investment policies. Secondly, they don’t do much in the way of measuring or attributingperformance, and thirdly their cost structure is unclear. Finally, the valuation principles of the portfolio are often unclear.†AFM said it is considering a follow-up investigation for hedge fundsoperating in the country, to decide whether additional regulation may be necessary.
Hedge funds have come under increasing scrutiny following the collapse of the Connecticut based Bayou Hedge Fund Group last week. Such failure has once more focused the attention of financial marketregulators on hedge funds. The State of Connecticut also said it may introduce additional regulations for hedge funds operating in the state.
Last year the United States Securities and Exchange Commission under former Chairman William Donaldson passed new hedge fund laws for hedge funds operating in the United States. But the lawstimulated significant opposition and controversy, to the point that it is the subject of a law suit by one New York based hedge fund manager. While time for the implementation of the US hedge fundlaws is fastly approaching, it still remains unclear if the laws will become fully operational by early next year’s deadline.
But Bayou’s problems will undoubtedly add more fuel to the arguments of regulators and world leaders pushing for additional regulations for the global hedge fund industry. A few months ago, GermanChancellor Gerhard Schroeder tried and failed at the G8 meeting in Scotland to win the support of other leaders for additional regulations on the global hedge fund industry. The Hedge fund industryin the Netherlands is still small; according to published reports, there are only about 5 hedge funds, and additional 45 funds of hedge funds operating in the country.
Paul Oranika
Contributing Writer
HedgeCo.Net
Email: Editor@hedgeco.net
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