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Hedgies face FSA/SEC tag-team crackdown

Global financial regulation took a step forward last week after the FSA and the US Securities and Exchange Commission announced they will band together to share data from hedge fund managers.

The two regulators agreed to identify a “common, coherent set of data” to help them spot the risks to regulatory objectives and mandates.

FSA chief executive Hector Sants said the discussions with the SEC were “valuable” and said the global crisis has “underlined how intertwined financial markets and institutions are and regulators around the world have to work together to ensure appropriate oversight.”

The announcement followed the fourth meeting of the SEC-FSA strategic dialogue.

Other issues discussed at the meeting included over-the-counter derivatives markets and central clearing; accounting issues; regulatory reform; credit rating agency oversight; short selling; and corporate governance and compensation practices.

Advisers welcomed a more coordinated approach to global financial regulation.

Ruth Whitehead Associates principal Ruth Whitehead says: “The global coordination has got to be a great deal better. In theory, this is a good idea and hopefully it is not just Britain and the US but the rest of the world will follow. It is good we are at the forefront of this, we have got to make it work, we have to learn from events of the last couple of years.”

Facts and Figures Financial Planners managing director Simon Webster says: “Investment in hedge funds is a complex international global business. It is therefore in my view not possible for a single country regulator to do the job effectively due to the cross-border nature of the business.

I think it is wise and sensible that there be some trans-Atlantic collaboration in this arena.

“It would be logical and sensible for other countries to join the information and best practice sharing arrangement but logic and politics do not often go hand in hand.”

Do you support a coordinated approach to global financial regulation? Is it workable? Is this news positive and a template for other countries to follow? Or is this going to stifle the hedge fund arena further along with the European Commission’s draft directive?

Let us know by clicking on the link below.

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  1. Hedgies face FSA/SEC tag-team crackdown
    FSA chief executive Hector Sants said the discussions with the SEC were “valuable” and said the global crisis has “underlined how intertwined financial markets and institutions are and regulators around the world have to work together to ensure appropriate oversight.” Grand words ~ but good regulation must surely start on each regulator’s home turf and good, cost-effective, accountable, effective, fair and unbiased regulation is what the UK at any rate most certainly has never yet had. The banks continue largely to do what they please with no regulatory checks and the FSA is as intent as ever on steaming ahead full tilt with its programme to decimate the IFA sector. Let it not be forgotten that the current economic crisis has arisen very largely as a result of lax to non-existent regulation of the banks on the parts of the FSA and the SEC. So far, I see no signs of that state of affairs changing.

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