LONDON, Feb 25 (Reuters) - Hedge fund supervisors worldwide will require hedge funds to provide uniform data across jurisdictions from September in a bid to spot broader risks more quickly, a global regulatory body said on Thursday.
The International Organization of Securities Commissions (IOSCO) published a template for supervisors listing 11 types of data that hedge funds will be required to provide.
“IOSCO believes that regulators should seek to develop a comparable and consistent set of data to be collected from local hedge fund managers and advisers to monitor systemic risks and prevent gaps in regulator reporting requirements,” Kathleen Casey, chairman of the body’s technical committee, said in a statement.
Hedge funds made heavy losses during the global financial crisis and have been accused of aggravating market volatililty by short selling stocks and other practices. That sparked the introduction of short-selling curbs, which the United States reinforced on Wednesday. [ID:nN24213831]
Policymakers say the sector is too opaque and not regulated enough although Britain’s FSA said on Wednesday that hedge funds do not pose a big risk to the global financial system. [ID:nLDE61M1IK].
Many hedge funds and their managers already report data but IOSCO wants this done on a consistent and global basis to make comparisons and information exchange between regulators easier.
The list of data includes basic information such as the manager’s name, number of funds and equity owners; as well as the names of auditors, custodians, recent performance, redemptions, total assets under management and the value of long and short positions in different assets.
Geographic spread, liquidity of a fund’s assets, the value of borrowings, net credit counterparty risk and top 10 positions will also have to be disclosed.
The Madrid-based IOSCO does not have lawmaking powers but its members, including the U.S. Securities and Exchange Commission, for which Casey is a commissioner, commit to implementing agreed guidance.
It has already backed mandatory registration of hedge funds, in line with pledges made by the G20 group of leading economies, which asked IOSCO to improve hedge fund transparency.
Casey said the list of data requirements may change as different jurisdictions adopt laws to regulate hedge funds. The European Union is set to agree on regulation later this year.
IOSCO members regulate more than 95 percent of the world’s securities markets in over 100 countries with the Cayman Islands, home to most of the world’s hedge funds, becoming a member last year.
Reporting by Huw Jones; Editing by Susan Fenton