The Council of the European Union has published its conclusions on hedge funds that were adopted at the 2798th Economic and Financial Affairs Council meeting on 8 May 2007. Among the conclusions the Council:
- Noted that the so-called “indirect supervision” approach, through close supervisory monitoring of credit institutions’ exposures to hedge funds and progress in upgrading their internal risk management systems, has so far enhanced resilience to systemic shocks.
- Recalls the need for creditors, investors and authorities to remain vigilant and to adequately access the potential risks that hedge funds present. In this context creditors and investors should also examine whether the current level of transparency of hedge funds’ activities is appropriate. In the exercise of their ‘indirect supervision’, relevant supervisory authorities should monitor developments and co-operate among themselves.
- Invites the Commission to take all relevant regulatory and market developments into account, in assessing the case for and against providing a Single Market framework for the retail-orientated non-harmonised fund industry, which might include some funds of hedge funds.