The challenge of reigning-in hedge funds through regulation and the need to improve disclosure requirements

[摘要] This study aims to look at the definition of the group of alternative investments commonlyknown as 'hedge funds', in order to better understand why regulatory bodies the worldover are vehemently working on introducing new legislation and guidelines as a means ofmaintaining market security and integrity in order to ensure adequate investor protection.This study posits that the two most viable options available to regulatory bodies to ensureeffective implementation of these changes are (i) to either further restrict access to hedgefunds and thereby curb their 'retailization' and/or (ii) to introduce rigorous levels ofdisclosure on the part of hedge funds and their intermediaries.It is the objective of this study to establish that for either of these options to be attained,tangible improvement in both the quantity and quality of information disclosure fromhedge funds and their intermediaries about their positions, strategies and exposures in amanner that would enable them to continue to provide the market efficiency-enhancingservices that they currently offer. After introducing all the key issues that have motivatedthis resolve, the study looks at the current regulatory environment and the challengesfacing regulators such as the varying degrees of banking freedom offered by differentstates and jurisdictions. Proposed changes to current legislation are also considered acrossseveral jurisdictions. The results from the local market field study set the platform forrecommendations to be investigated in future studies in order to provide guidelines for the supervision of the hedge fund industry.

[发布机构] Stellenbosch University