The creeping threat of hedge fund regulation

After a successful decade of expansion, the hedge fund industry is having to come to terms with an unpleasant development: the creep of regulation. In the US, the SEC introduced its registration rule, covering managers based not just onshore but offshore as well. In the UK, the FSA has stated its intention to monitor asset values closely as well as levels of disclosure to hedge fund clients. At the same time it is looking to authorise funds of hedge funds. The comparative lack of regulation until now has no doubt speeded up the expansion of the industry, allowing funds and businesses to...