Small Hedge Funds Pained By New Regulations

Hedge funds have bounced back in a big way from the financial calamity of 2008, but that hasn’t stopped regulators, especially in Europe, from pushing through a bevy of new rules.
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Hedge funds have bounced back in a big way from the financial calamity of 2008, but that hasn’t stopped regulators, especially in Europe, from trying to hit the industry with a bevy of new rules.

The Managed Funds Association, the industry’s main lobbying group, was recently forced to turn over information about its 2,600 members to the Financial Crisis Inquiry Commission. The info could be used to force hedge fund managers to register with the SEC and provide the agency with information about their leverage and trading positions. Regulators in the European Union recently passed even more onerous rules that critics say will cause funds to relocate from their current hub in London.

The costs involved with complying with the proposed regulations aren’t that costly for big funds with billions under management, but smaller firms will feel the pain, according to John Carney at CNBC.com. That could spur even more consolidation along the lines of Man Group/GLG deal yesterday.

Hedge Fund Inquiry Will Slam Small Funds [CNBC.com]

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