AIMA Welcomes UK Release of White Paper for Further Reform of Financial Markets and Hedge Funds
Hedge Fund Law Report
On July 8, 2009, the United Kingdom (UK) Treasury released proposed reforms designed to ensure that banks and financial markets will be more resilient to future shocks to the global financial system. The recommendations set out in the UK White Paper include tougher regulations of individual firms, better monitoring and management of systemic risk, the creation of a Council for Financial Stability, measures to deal with potential institutional failures, and greater protection for depositors. Most significantly, the White Paper recommends granting more power to the UK Financial Services Authority (FSA). These powers would include enforcing new disclosure requirements for hedge funds in order to gather information regarding their funding, leverage and investment strategies. In a speech to launch the White Paper, Chancellor of the Exchequer Alistair Darling said that the UK government would be tasked with taking “account of new developments in the financial sector – including expanding regulation where necessary – for example of systemically important hedge funds.” The UK government plans to introduce legislation recommended by the White Paper in the 2009-2010 parliamentary session. We detail the new disclosure requirements for hedge funds outlined in the White Paper and the AIMA’s reaction.