The Commission has started a consultation on hedge fund activities to help it decide appropriate regulation. The consultation covers:  

  • Systemic risks: do regulators have the mechanics to monitor and react to risks originating in the hedge fund sector;
  • Market integrity and efficiency: do the activities of hedge funds threaten the efficiency and integrity of financial markets;
  • Risk management: should authorities worry about the way hedge funds manage the risks to which they and their investors are exposed, value their asset portfolios and manage any potential conflicts of interest; and
  • Transparency and investor protection: are hedge fund investors adequately protected and do they get the information they need.  

The Commission wants responses by the end of January and will use the results in its discussions with G20 on international concerns over hedge funds