Saturday, 24 September 2016
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Sep 10 2013 | 9:46am ET
They may not be particular fans of any of them, but when it comes to the raft of new rules facing hedge funds, there's little question of which they like the least.
The U.S. Foreign Account Tax Compliance Act, new disclosures to the Securities and Exchange Commission and the European Union's Alternative Investment Fund Managers Directive are the three most irritating new regulations, according to a poll of large hedge fund managers by Sungard and Aite. The 40 firms, each with at least US$1 billion in assets, named FATCA—which requires disclosure of confidential information about U.S. clients to the Internal Revenue Service—the worst.
"FATCA varies from country to country and thus carries a high degree of uncertainly and complexity," Sungard and Aite wrote.
Form PF, the SEC filing required by the Dodd-Frank financial reform law, "is certaintly the overwhelming concern among U.S. funds, while AIFMD's patchy implementation brings concerns of increased complexity to fund administrators." More than half of EU countries failed to adopt AIFMD rules by the July 22 deadline.
Fund managers also expressed concerns about cost-cutting, with more than 40% noting that "operational efficiency" was either "very" or "extremely" challenging, and nearly a third complaining that a lack of operational investment resources was hurting their ability to generate alpha. And most respondents—three-quarters—say they plan to reduce or hold the line on technology spending over the next three years.