Denmark And Norway Mulling New Hedge Fund Regulations

by Philip Morton, Investors Offshore.com

25 May 2005

It emerged earlier this month that both Norway and Denmark are putting in place new regulatory frameworks for hedge funds in order to attract increased investment in this area.

Neighbouring Finland and Sweden have had such rules in place since the late 1990s, and have reaped the benefits in recent years.

In an interview with European Pensions & Investment News (EPN), Charlotte Møller, the FSA deputy financial inspector responsible for drafting the Danish proposals, explained that:

"We realised that if we did not get more involved and provide regulations for hedge funds, Danish investors would simply go to Sweden and offer their funds from there."

Under the draft rules, hedge funds would be permitted to organise themselves as associations, and would not need to limit their investment policies or risk profiles.

The EPN report went on to add that in Norway, meanwhile, hedge funds will be permitted to structure themselves as mutual funds rather than stock companies. They will additionally be required to make clear the risk levels that they are able to accept, and must provide regular reports on their risk management strategies.

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