Canada Plans Strict Hedge Fund Oversight

Feb 21 2007 | 10:53am ET

As regulators in the United States and Europe argue and haggle over what hedge fund regulation—if any—should look like, the great frozen north is about to become a four million square mile testing ground for strict regulation and cooperation among independent regulatory authorities.

The Canadian Securities Administrators, the cooperative umbrella group for Canada’s 13 provincial and territorial securities regulators—the country has no national regulatory body—has unveiled plans to harmonize their regulations and regulate hedge funds as tightly as they do mutual funds. Under the proposal, which the CSA hopes to have implemented by the end of the year, hedge funds will be required to register with their provincial or territorial regulator and pass proficiency tests.

In addition, both managers and sales staff would have to undergo a background check. For their troubles, those that pass muster will be entered into a national registry, granting them recognition across Canada. That registry should be up and running by April 2008, according to the Ontario Securities Commission, the largest of Canada’s regulators.

The Canadian hedge fund industry manages some C$26.6 billion (US$22.7 billion) in assets. Regulators have been under pressure to place more stringent checks on the funds since the collapse of domestic hedge funds Portus Alternative Asset Management and Norshield Asset Management. In addition, the trader behind the Amaranth Advisors collapse, Brian Hunter, was based in Calgary, Alberta.

Interested parties have four months to comment on the CSA’s 124-page draft.

Canada’s move comes in the wake of the recent G7 meeting, at which Germany pushed for harmonization of international regulation of the funds.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note