Deputy Chairwoman of the Alternative Investment Management Association, Lesley Harvey, told a hedge fund conference in Johannesburg last week that the Treasury and the FSB had met a number of hedge fund managers. "They want to understand the full implications of anything they do before they publish any regulations governing the hedge funds industry," she said.

Harvey said that new tax rules would come first, followed by changes to the Collective Investment Schemes Act to create a separate category for regulating hedge funds.

The hedge fund sector in South Africa is comparatively small, managing just R22bn, and is not open to retail investors. But local regulators are echoing worldwide concerns that have seen pressure for greater monitoring or regulation of hedge funds, particularly from Germany, although no concrete steps have been taken at an international level.

Harvey said that although there was no specific hedge fund legislation in South Africa, hedge-fund managers were regulated under the Financial Advisers Intermediatory Act as "discretionary financial services providers".