EUROPEAN UNION: IOSCO have Published Report on the Fourth Hedge Funds Survey

Friday November 24 2017

The International Organisation of Securities Commissions (IOSCO) have published a report on the Fourth Hedge Funds Survey.

The IOSCO Hedge Fund Survey is an international data exercise which assembles information from national competent authorities on hedge fund activities for the purpose of sharing data. The Survey enables the collection and sharing of information on the scope of hedge fund activities, the markets they operate and invest in, and their leverage and funding.

The aim of collecting such data enables IOSCO to:

• Gain a better insight into the global hedge fund industry;
• Promote global cooperation on possible risks in this sector; and
• Provide a forum for the discussion of potential regulatory options or recommendations if required.

A prominent trend across Europe in recent years is the emergence of so-called ‘liquid alternative’ funds. These are regulated mutual funds implementing alternative investment strategies – often similar strategies traditionally employed by hedge funds, albeit within certain constraints – while providing daily or weekly liquidity. These funds are generally structured as UCITS. They can often be marketed to retail investors, although some European countries have sought to apply marketing restrictions.

The growth of this market is part of a wider trend towards the convergence between traditional asset managers and firms that have historically managed hedge funds. Liquid alternatives often represent the vehicle through which traditional managers are launching products that are more alternative in nature, and alternative fund managers are attempting to capture a wider audience for their investment strategies.

United Kingdom

AIFMD reporting data has significantly improved the FCA’s ability to monitor alternative investment fund information on a regular basis and its ability to reduce relevant risks with supervisory work, but it has identified some information gaps. This is especially the case with master AIFs, some of which have large trading footprints in specific market segments, and also have significant leverage relationships with other market counterparties.

The report also provides detailed statistics on Parallel Accounts, Fund Domiciles, Investment Strategies, Investment Exposures, Leverage, Collateral, Trading and Clearing and Liquidity.

Please click on the above link for more information.