Hedge funds prefer to declassify their business than regulation

As a response to the EU decision to regulate hedge funds market the Alternative investment Management Association (AIMA) made a statement that it will unveil the secrecy of hedge funds. The trade body whose members manage over 75% of hedge fund assets across 43 countries proposed that hedge funds would disclose all significant trading positions to global regulators, including short positions.

As it was already reported at the summit of German, French, Italian, Spanish, Dutch and British leaders held in Berlin participants came to a conclusion that strict measures should be applied to impose wholesale regulation on the hedge funds sector. In a move to divert this possible bank-like control AIMA promised to lift the veil of secrecy over the business.

It also said that it would support the supervision of managers based on a model proposed by the Financial Services Authority and a new regulatory code based on proposals from various international bodies. The association hopes that its pre-emptive concessions will be enough to prevent the adoption of the strict rules that as AIMA claims would adversely impact funds' ability to make money.

AIMA chief executive Andrew Baker said: "We want to dispel once and for all this misconception that the hedge fund industry is opaque and uncooperative. That's why we are declaring our support for the principle of full transparency of systemically significant positions and risk exposures by hedge fund managers to their national regulators."