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Beverly Chandler, Opalesque London:

A note from Australia’s Lexology reported on the Australian Securities and Investments Commission (ASIC) long-awaited changes to the definition of a 'hedge fund’ (and 'fund of hedge funds’) for the purposes of determining the application of the shorter Product Disclosure Statement (PDS) regime, and the application of enhanced PDS disclosure under ASIC Regulatory Guide RG240. The firm writes that the original 'hedge fund’ definition was unclear and too broad which had the unintended consequence of capturing many types of funds that should not have be treated as hedge funds.

Alex Wise, Head of Fund Services at Select Asset Management comments: "Initially the definition was wide enough to catch many equities managers who consider themselves active or long only, the new draft has gone a long way to address some of these issues".

Lexology comments that the troubled history of this definition is reflected in the number of delays in its finalisation. "The shorter PDS regime applying to simple managed investment products commenced on 22 June 2012. At the last minute, ASIC issued interim relief to exclude 'hedge funds’ from the application of the shorter PDS regime and to allow those 'hedge funds’ that had prepared shorter PDSs until 22 June 2013 ......................

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