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By Christine Gaylican, Opalesque Asia:

As the new regulatory measures to strengthen the global financial industry evolve and take shape, investment and hedge fund managers are encouraged to prepare the resources for quick and smooth compliance.

Experts in investment management led by a former director from the United States Securities and Exchange Commission (SEC) said technological advancement would enhance chances of survival and 100% compliance to the proposed stricter rules.

Evolving regulatory environment

In the European Commission’s proposal contained in the Directive for Alternative Investment Fund Managers (AIFM) published in May 2009, investment fund managers that provide management services within the European Union with assets under management of US$1.47 million will need authorisation from their home member state and is subject to ongoing requirements.

Furthermore, managers who fall under the criteria above will be required to report to their home regulator on a regular basis with matters such as risk profile, use of short selling, and exposures and concentrations.

Managers will be required to supply investors with a variety of information prior to the investor investing in the relevant hedge fund, and subsequently on a regular basis. Many of the additional disclosures reflect existing standards, such as those of the Hedge Fund Standards Board.

A study made by Herbert Smith LLP (......................

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