AIMA Welcomes EU Hedge Fund Initiative

by Ulrika Lomas, for LawAndTax-News.com, Brussels

05 February 2009

The Alternative Investment Management Association (AIMA), the trade body for the global hedge fund industry, has responded to the European Commission’s Consultation Paper on Hedge Funds and called for a global response to the current crisis.

AIMA’s CEO, Andrew Baker, said: “AIMA is dealing with policy makers and regulators at a national, European and international level on the future regulatory framework of the hedge fund industry. While we do welcome this initiative by the European Commission, the current problems are global and therefore we believe that ultimately, a coherent, global response is needed."

In December, the Commission launched a wide-ranging public consultation on policy issues arising from the activities of the hedge fund industry, in view of developing appropriate regulatory initiative. The results of the consultation will be discussed at a high-level conference in Brussels in late February 2009, and will serve as the basis for European input into the parallel reflections on hedge funds at international level by the G20.

The consultation is part of the Commission's comprehensive review of regulatory and supervisory arrangements for all financial market actors in the European Union, which is to be finalised in 2009 upon consideration of the report of the High Level Expert Group chaired by Jacques de Larosière. It also responds to the recent reports by the European Parliament, which raise a number of concerns that have come into sharper international focus as hedge funds have, like many other financial actors, been heavily affected by the current financial crisis.

"The Commission is right to address areas of concern about the hedge fund industry," Baker continued, adding:

"I would say that many of these issues are not unique to hedge funds and should not be looked at in isolation. It is also important to stress that the hedge fund industry in Europe is currently regulated and that regulatory framework has shown itself to be robust in very difficult market conditions."

"The hedge fund industry in Europe and elsewhere has been hit very hard by the current crisis, but has responded in an orderly way and has not triggered any systemic risks. Hedge funds did not cause the present market turmoil and because they have an essential role in providing liquidity to the markets, are important in assisting any eventual recovery."

Baker concluded: "We look forward to working with the Commission and other bodies to formulate a regulatory framework for the future and we believe the active cooperation and leadership we are providing on behalf of the industry will prove helpful.”

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