Canadian regulators will require fund managers to register with the country’s provincial securities commissions as part of a multi-pronged attempt to improve oversight of what the Globe & Mail describes as the “scandal-plagued hedge fund sector.”
“Registration means regulators will ensure fund managers have appropriate capital and insurance, and have sufficient experience and proficiency to carry out their duties,” the report says, citing Leslie Byberg, manager of investment funds at the Ontario Securities Commission.
Currently, only individuals who manage specific investment portfolios have to register. The new rules would also cover those executives who set up and operate the funds themselves.
The Canadian Securities Administrators recently reviewed 37 hedge funds and nine other investments known as principle protected notes worth a total C$2.7bn, saying there were problems with the way performance returns were presented and also a lack of clarity on fees.
PPNs, the article notes, are often used to help market hedge funds, but are not treated as securities for regulatory purposes.