IOSCO has published its final report on hedge fund oversight, including six high-level principles. The principles are:
- mandatory registration for hedge funds and/or their managers/advisers;
- registered entities to comply with ongoing requirements on organisation and operational standards, conflicts of interest and conduct of business, disclosure to investors and prudential regulation;
- registration/regulation and supervision for prime brokers and banks that fund hedge funds, with appropriate risk management to monitor counterparty credit risk exposures to hedge funds;
- managers/advisers and prime brokers to provide relevant information to regulators for systemic risk purposes;
- regulators to encourage and take account of good practice developments; and
- regulators to share information and co-operate.