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

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.