EUROPE: EFAMA Hedge Fund Regulation Comparative Survey

Tuesday November 29 2005

EFAMA has today published, in association with Italy’s asset management association `Assogestioni` a comparative survey on Hedge Fund regulations in Europe. The survey revealed the existence of a partial, almost surreptitious “de facto harmonisation” of the European hedge fund regulations. However, a number of inconsistencies in the regulatory frameworks of hedge funds of the individual Member States appeared: for example, a minimum level of underwriting for purchasing shares in the hedge fund is not always specified, nor is there a set maximum number of participants in the fund.

In the same way, while hedge funds allowed to deal directly with the retail sector are not always constrained by identical restrictions on investment (in terms, for example, of limits on the use of leverage or, for funds of funds, of target hedge funds to invest in), those systems governing hedge funds as a “selective” product prohibiting distribution amongst the general public do not adopt uniform rules for “private” investment. The present regulatory framework in these countries does not foster a single market for hedge funds.

The survey can be viewed at the above link or by opening the attached PDF.