The IOSCO Technical Committee published its Consultation Report, entitled Hedge Funds Oversight on 18 March 2009 (the Consultation Report). The purpose of the Consultation Report was to describe the operating environment of hedge funds, highlight the associated regulatory risks, review and illustrate the work and recommendations issued by IOSCO and other international organizations and regulators in this area and to make preliminary recommendations of possible principles and actions that may serve to mitigate these risks.

The aim of this Final Report is to recommend the following six high level principles on the regulation of hedge funds, taking into account the outcome of the public consultation and the hearing held in Madrid on 20 April 2009:

i. Hedge funds and/or hedge fund managers/advisers should be subject to mandatory registration.

ii. Hedge fund managers/advisers which are required to register should also be subject to appropriate ongoing regulatory requirements relating to:

a. Organisational and operational standards;
b. Conflicts of interest and other conduct of business rules;
c. Disclosure to investors; and
d. Prudential regulation.

To read the report in full, please click here