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AIMA Presentation. Hedge fund regulation in mature capital markets. AMAC Annual Conference 2014, Beijing Jack Inglis Chief Executive Officer, AIMA. Contents. About AIMA Industry trends Typical hedge fund structures Regulatory environment Conclusion. About AIMA. AIMA Presentation.
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AIMA Presentation Hedge fund regulation in mature capital markets AMAC Annual Conference 2014, Beijing Jack Inglis Chief Executive Officer, AIMA
Contents About AIMA Industry trends Typical hedge fund structures Regulatory environment Conclusion
AIMA Presentation Industry trends
Historical industry growth Source: Hedge Fund Research
Billion-dollar club Source: HedgeFund Intelligence, December 2013
Hedge fund investor base Source: Barclays Capital Solutions, “Waiting to exhale”, January 2014
AIMA Presentation Typical hedge fundstructures
Typical structures Hedge Fund Manager Regulators Service providers (Custodian/ Prime Broker/ Administrator) US taxpayinginvestors Onshore US Feeder Fund (e.g. Delaware) Offshore Master Fund(e.g. Cayman) Non US - US tax exemptinvestors
Hedge fund domiciles Source: Eurekahedge
AIMA Presentation Regulatory environment
Regulatory goals and intensity (pre-crisis) Regulatory intensity Standard market abuse rules Trade transparency in equity markets Removing stock exchange monopolies Basic supervision of participants, activities and products Focus on retail Focus on banks Market Integrity Market efficiency Competition Supervision Financial stability Investor Protection
Regulatory goals and intensity (post-crisis) • Even greater retail protection • Professional investor protection • Market transparency in non-equities • Multilateral trading venues • Data Reporting • Mandated central clearing • & margin for OTC • New banking regulation • SIFI focus • Greater intrusion • New tools and powers • New institutions • Unbundling • Level playing field for exchanges/ dealers • New Participants • Increased Product Scope • Heightened sanctions • Increased enforcement Regulatory intensity Market Integrity Market efficiency Competition Supervision Financial stability Investor Protection
Regulatory impact Hedge Fund Management Company Management and operations T A X Distribution Hedge Fund Markets Trading
Regulatory impact Title IV Hedge Fund Management Company Management and operations T A X FATCA Form PF ELTIF AIFMD UCITS FTT JOBS Distribution Hedge Fund CPO/PQR 40 ACT EMIR BEPS MAD Markets Trading MiFIR Title VII CRD/CRR MiFID
Conclusions Hedge fund industry is heavily regulated in all key mature jurisdictions Industry went through the financial crisis and did not cause systemic problems Regulatory intrusion requires greater operational sophistication and that comes at a cost...... .......But compliance gives institutional investors greater confidence
Jack Inglis Chief Executive Officer, AIMA Tel: +44 (0)20 7822 8380 Fax: +44 (0)20 7822 8381 Email: jinglis@aima.org Web: www.aima.org Contact