HEDGE FUND - PROPER REGULATIONS REQUIRED NOW!! (ALERT) - By Nik Zafri
Article 1 about Hedge Funds (Facebook Version) and Article 2 about Hedge Funds (Blogger Version)
Many disagreed with me at that time -- Yes...because it was written in 2009. (too early) - FYI - I was monitoring the European (EC) market at the time I wrote that article - I saw signs that there is a need to tighten up the loose ends especially on the subject hedge funds which I believe will become a talk in Malaysia (next week - May, 2010)
Here's latest news from Singapore (Courtesy of Bloomberg) :
Singapore Reviews Hedge, PE Funds as Regulators Boost Oversight
By Netty Ismail
April 22 (Bloomberg) -- Singapore said it will review rules for its investment management industry, including hedge-fund and private-equity managers, as regulators increase oversight globally.
Hedge funds and private-equity firms are under scrutiny from regulators and lawmakers worldwide, who say they are partly to blame for the worst financial crisis in a generation. Singapore’s hedge-fund industry has grown into Asia’s second biggest behind Hong Kong as the government lured investment management professionals with tax incentives and grants.
Hedge funds worldwide posted net outflows of $285 billion last year, leaving assets at $1.6 trillion, according to Hedge Fund Research Inc., a Chicago-based research firm.
The regulator has set up the Investment Intermediaries Department to supervise intermediaries, including alternative investment managers, and to “drive regulatory policies” governing the industry, according to yesterday’s statement.
“MAS adopts an open and consultative approach with the industry, and remains committed to building Singapore as a fund management and alternative investment hub,” the regulator said.
World leaders, including the Group of 20 countries that make up most of the world’s economy, have called for stricter oversight of the pools of private capital in the wake of the global financial crisis.
Funds won’t be able to get investment from U.S. banks, under proposals announced in January by President Barack Obama. The European Union’s Directive on Alternative Investment Fund Managers is currently being debated, with the European Parliament scheduled to vote on a final draft this year.
The “business and regulatory environment remains conducive to both traditional and alternative managers” in the city-state, MAS said.
MAS, also Singapore’s central bank, said last year it will fine-tune its “regulatory approach as appropriate,” after moves to make it easier for hedge funds to set up shop in Singapore than in other Asian cities such as Hong Kong and Tokyo helped fuel the industry’s growth in recent years.
Hedge-fund managers are currently exempt from holding a capital-markets services license, provided they manage funds on behalf of 30 or fewer of what MAS describes as “qualified” investors. “I believe that the exempt fund-manager status should be replaced with light regulation,” said Albert Ee, founder of Singapore-based hedge-fund firm Pilgrim Partners Asia Pte. “As a financial centre, it’s important that hedge funds in Singapore should be run by experienced managers with good risk management processes and strong corporate governance.”
Singapore’s hedge-fund industry has grown to 138 single- strategy hedge-fund managers employing more than 800 professionals from near zero in 1997, according to a survey by the local chapter of the Alternative Investment Management Association. The industry oversees at least $34.9 billion, excluding assets managed by several of the large global firms, it said, making it Asia’s second biggest.
The island-state’s “lighter regulatory touch” has enabled hedge-fund managers to set up business “relatively quickly,” without risking any delay in getting the necessary licenses from the regulator, according to an overview of the industry published by AIMA.
Hedge-fund managers in Singapore are still subject to local rules on securities and futures trading as well as money laundering.
The size of Singapore’s asset management industry shrank about 26 percent to S$864 billion ($630 billion) in 2008 from a year earlier because of the global financial crisis, the authority said in its latest survey released in September.
--Editors: Andreea Papuc
Nik Zafri's 'Unqualified' Comments (so don't quote me on this)
Yeap, I think Singapore is going somewhere. I did mentioned in one of my 'analysis' that Singapore will boom first and followed by Malaysia. But most definitely; as I said; this issue will become the next talk, next week (May 2010) So, just in case...
On Hedge Funds - fellas, I am not against it - Here's some excerpts :
I still think that Malaysia (in particular SC) should keep a close surveillance by having a revised version of regulations to monitor private equity company's especially.
European policymakers said:
"They (Hedge Fund Managers) many have exacerbated it by fueling bubbles with leveraged investments in the good times and then offloading assets by the bucket-load in the bad times"
Initial proposal from Nik Zafri to anyone out there reading my blog - who wish to listen :
You (Hedge Fund Managers) must first reveal your plan :
(To the proper authorities..I don't know..maybe SC, Inland Revenue, BNM) on:
a) managing level of capital,
b) managing risk,
c) valuation of assets and most important
d) your strategy in doing business.
2nd - STOP NOW if you're involved in any trade relating to MONEY LAUNDERING!! (so, is this the thing you're being discreet about?) Get out now before it's too late!
3rd - It's time to pay based on gains not losses!! Otherwise, we will go back to square 1...make money during down market..gosh...
Having this sort of regulations may help our economic recovery further but of course if the regulations are not strict enough and having loopholes...definitely there can be abuse - some people in the market will always creatively found a way to do 'evasive maneuvers'