Hector Sants has spoken on FSA’s view of hedge funds and hedge fund standards. He said:
- FSA is again surveying prime brokers to check hedge fund appetites;
- some funds have failed and more may do so in the current crisis;
- the Hedge Fund Standards Board shows the industry’s commitment to confront regulatory concerns;
- managers must be aware of the risk of mis-marking frauds and consider how they can address the risk in their business models;
- FSA acknowledges the need to address lack of disclosure of CfDs;
- hedge fund managers must take their share of responsibility in trying to ensure market integrity; and
- although many stress testing scenarios FSA is encouraging may be less relevant for hedge fund managers than for other market participants, managers should still plan for what happens if funds under management suddenly fall, and for the impact of forced liquidations.