Full transparency of big hedge fund positions from now on: AIMA

The peak body for the global hedge fund industry, the Alternative Investment Management Association (AIMA) has backed a proposal mandating the full transparency and disclosure of ‘stematically significant’ positions and risk exposures held by hedge funds to their national regulators.

The principle is one of many positions announced in a new AIMA policy platform, formulated while representing the global hedge fund industry in international discussions about the future regulatory framework for hedge funds.

The talks were tasked by the G20 and are being convened by organisations such as International Organisation of Securities Commissions (IOSCO) and the Financial Stability Forum.

The new policies put forward by AIMA were:

1) Regular reporting and better transparency of systematically significant positions held by large hedge funds to their national regulators;

2) An aggregated short-selling disclosure regime to national regulators;

3) Support for new policies to reduce settlement failure (encompassing naked short-selling);

4) Support for a “global manager-authorisation and supervision template” based on the UK’s Financial Services Authority; and

5) Call for unified global standards for the industry based on the convergence of work by AIMA, IOSCO, the Hedge Fund Standards Board, the US President’s Working Group on Financial Markets and the Managed Funds Association.

In a statement, Andrew Baker, the chief executive of AIMA based in London, said the peak body supported the disclosure measures in order to improve unfavourable perceptions of hedge funds.

“We want to dispel the misconception that the hedge fund industry is opaque and uncooperative,” Baker said.

AIMA’s 1,200 members, which include hedge funds, prime brokers and fund administrators, manage more than 75 per cent of hedge fund assets globally.