The International Organisation of Securities Commissions is to examine the impact of hedge funds on the financial markets and assess the ris...

The International Organisation of Securities Commissions is to examine the impact of hedge funds on the financial markets and assess the risk they pose to investors. According to Michel Prada, chairman of IOSCO’s technical committee and head of the French authority, Autorité des Marchés Financiers, it is the widening of the target market of hedge funds away from the traditional institutional and high net worth markets towards retail investors that has made the study necessary. Until now, national regulators have shied away from protecting investors from hedge funds fearing that introducing regulation would push the funds to offshore centres where regulation may be less stringent. Separately, the Securities and Exchange Commission in the US is to start a national hedge fund register and the UK’s Financial Services Authority has recently published a consultation paper suggesting that London-based hedge funds should be monitored more closely.