Hedge fund regulations open for public comment

Draft regulations and a related explanatory memorandum for hedge funds were published for public comment on Thursday, the Financial Services Board (FSB) and Treasury said.

“The intention is to still finalise the regulations by the second quarter of this year. However, this will be dependent on the nature and extent of the comments received, which could necessitate the finalisation in the third quarter of 2014.”

Hedge funds are pooled investment schemes supervised by a professional management firm, investing in a wide range of markets and using a variety of investment styles and financial instruments.

In 2012, South Africa began enhancing and expanding the scope of regulation of hedge funds in the wake of the global financial crisis.

On September 13 of that year the proposed framework for hedge fund regulations was initially released for public comment.

“The extensive comments received from industry participants, industry bodies, regulatory bodies and other interested parties were carefully considered by the Treasury and FSB, and laid a good foundation for these draft regulations.”

During the drafting process, the industry was also invited to make inputs. The final regulations would be realised in terms of the Collective Investment Schemes Control Act (Cisca).

“The declaration will also include those provisions of Cisca that will be applicable to hedge funds,” the Treasury and FSB said.

The draft regulations can be found on www.fsb.co.za and www.treasury.gov.za.

Comments must be submitted by May 23.

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Hedge fund regulations open for public comment