The global hedge fund industry’s trade association, the Alternative Investment Management Association (AIMA), has published its latest statement of policy principles addressing issues such as investor protection and systemic risk.
The principles, which are set out in a new paper, set down AIMA’s core beliefs in terms of investor protection, regulatory consistency, systemic risk and market integrity. The paper builds on AIMA’s policy platform that was issued in 2009.
It says its principles for improving investor protection include robust rules to ensure the segregation and protection of investor assets and collateral, and a call for regulation that reflects the difference between retail and professional investors.
As for regulatory consistency, AIMA says that policymakers should continue to seek a coordinated international framework which preserves the cross-border nature of financial markets; and that they should strive to avoid extra-territoriality and regulatory overlap, which it says can lead to market fragmentation and regulatory arbitrage.
It says its principles for understanding and mitigating systemic risk include maintaining a diversity of market participants, investment strategies, and mechanisms, to end the problem of moral hazard. And, it terms of market integrity, it advocates clearly-defined, internationally-harmonized rules and sanctions against market abuse.
AIMA chair, Kathleen Casey, said that it aims to actively participate in developing policies for asset management and financial markets regulation with the aim of improving investor protection, market transparency and financial stability overall.
“It is in the deepest interests of the global hedge fund industry that the financial markets on which it operates are well-functioning. This is why we have worked to develop our 2009 platform further, also addressing areas which have not been treated previously,” she said. “This paper therefore presents an enhanced list of principles which AIMA supports as part of its overall policy on key issues facing the global hedge fund industry and financial markets in general.”