The Shape of Hedge Fund Regulation to Come: Whistleblower Programs, Capital Requirements and Restructured Regulators

On the heels of the worst year of hedge fund performance in recent memory, capped by lurid and still unfolding scandals, hedge fund managers are bracing for the near inevitability of new regulations for the industry. We discuss in detail two potential categories of new regulations – strengthened whistleblower programs for hedge funds and capital requirements for hedge funds similar to those applicable to mutual funds. Specifically, we address the mechanics of such potential regulations, the precedents and some of the practical obstacles to implementing such regulations. Also, we explore other potential new regulations, and the contemplated restructuring (and consolidation) of financial market regulators.

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