07/10/2009 Author: Tony Griffiths

FSA plans survey of funds of 'systemic importance'

UK regulator the Financial Services Authority (FSA) has revealed plans for a new survey of the hedge fund sector which will see 50 of the UK’s biggest fund managers assessed for systemic importance. The move is part of efforts to address calls for fresh data collection made at the G20 in April and by FSA chairman Lord Turner in his March report.   
 
The FSA survey, expected to be initiated this month, will gather information on issues such as concentration of risk positions and use of leverage, with a view to establishing the ‘footprint’ of funds and managers. The findings are likely to be published in early 2010, said Andrew Crain, the FSA’s hedge fund supervisor, speaking last week.

While the October survey will just cover 50 of the larger managers that are authorised by the FSA, the watchdog has not ruled out enlarging catchment at a later date. “We may choose to expand this in the future but we are mindful of the need to keep the survey proportionate to the risks it seeks to mitigate,” an FSA spokesperson told HFMWeek.

“Since the publication of the Turner Review, we have been working hard to design an appropriate framework for the collection and sharing of this systemically important information.”

The new survey is a separate initiative to the FSA’s biannual prime brokerage study.  

European G20 commitments were the subject of a regulatory panel discussion in London last week, where the FSA and France’s AMF discussed industry concerns over the AIFM Directive. AMF representative Patrice Berge-Vincent said there was general agreement that the proposals would be significantly amended, highlighting valuation and marketing as problem areas (see feature p15).