Hedge funds, which are proving to be a headache for stock market regulators across the world, will be the main topic of discussion at the four-day annual conference of the International Organisation of Securities Commissions to be held early next month in Mumbai.
Martin Wheatley, chief executive officer of Hong Kong's Securities and Futures Commission, will chair a panel discussion on 'Hedge Funds -- New Regulatory Challenges' at the IOSCO conference. This is the first time, India is hosting a conference of securities commissions.
The conference, to be held from April 9 to 12, will be attended by some of the leading capital markets regulators across the world, including the Financial Services Authority of the UK.
The other top topics on the agenda relates to the 'Securities Exchange Evolution and the Regulation of Transnational Securities Exchange' and 'Capital Markets and Economic Development -- New Avenues for Financing of Small- and Medium-Size Enterprises.
The discussion on hedge funds, say experts, may help the Securities and Exchange Board of India to have more clarity on a proposal to allow direct entry for hedge funds into the Indian market. The meltdown in global stocks in recent days was also partially blamed on hedge funds, which dumped their investments funded by borrowings in Japan due to strengthening of the yen.
Reportedly, most hedge funds are taking exposure in the Indian stock market through participatory notes issued by the foreign institutional investors.
The recent collapse of some high-profile hedge fund such as the Connecticut-based Amaranth, which lost $6 billion after its bets in natural gas went wrong, and the Denver-based Red Kite, which made huge exposures in copper and zinc, have put the global regulators on guard to regulate these entities. Hedge funds are known for quick entry and exit from asset classes, as they try to maximise returns for investors.
Dan Waters from the UK's FSA will be the main presenter on the hedge funds, while John Gaine, president of Managed Funds Association, Peter Douglas, chairman of the Singapore Chapter of the Alternative Investment Management Association, and chairman of GFIA, and Alain Reinhold, member of the EU Commission Expert Group on Alternative Investments, Robert Aitken, global head of legal and compliance, Mann group, will be the other speakers.