Tuesday, 23 September 2014
Last updated 13 hours ago
Sep 5 2013 | 11:41am ET
The Alternative Investment Management Association, a hedge fund lobby group, is calling for regulatory consistency to protect the cross-border nature of financial markets.
In a paper it calls an “enhanced statement of its policy principles,” the group warns of the dangers of “extraterritoriality and regulatory overlap,” which it says can lead to market fragmentation and regulatory arbitrage.
In addition to regulatory consistency, the group also addresses the issues of investor protection, systemic risk and market integrity.
AIMA’s principles for improving investor protection include robust rules around the segregation and protection of investor assets and collateral and a call for regulation that reflects the differentiation between retail and professional investors.
In the area of risk mitigation, the group calls for the maintenance of a diversity of market participants and investment strategies and mechanisms to end the “too big to fail” problem.
The AIMA paper also sets out a number of methods for improving market integrity, including clearly-defined and internationally-harmonized market abuse rules and effective market abuse sanctions.
Said Kathleen Casey, AIMA chair, in a statement: “Capital markets are crucial in the financing of the economy and the hedge fund industry plays an ever increasing role in the entire chain of investing and financial intermediation, contributing to market depth, sophistication, transparency and thus its ability to support growth.
“It is in the deepest interests of the global hedge fund industry that the financial markets on which it operates are well-functioning. This is why we have worked to develop our 2009 platform further, also addressing areas which have not been treated previously."
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