07/07/2010 Author: Tony Griffiths

Commission sets deadline for hedge fund risk survey

The deadline for US hedge fund managers to respond to a nationwide survey on market risk has been set for the end of July, as the committee investigating the effects of the global financial crisis in the US turns its attention to hedge funds.

The Financial Crisis Inquiry Commission (FCIC) issued its Hedge Fund Industry Market Risk Survey on 29 June, a copy of which has been obtained by HFMWeek. Managers are expected to respond by 30 July or risk a subpoena.

According to an HFMWeek source, the survey has been sent to a broad range of managers – “large, small, MFA [Managed Futures Association] members and non-MFA members.” Information expected includes leverage, short-selling, counterparties and redemptions. There are specific questions relating to the shorting of securities in AIG, Bear Stearns, Lehman Brothers and Merrill Lynch, and certain asset-backed securities.

The survey concentrates on the period 30 March 2007 to 30 March 2010, with information requested quarterly. However, more detailed, weekly data is expected for three key phases: July-August 2007; March 2008; and September 2008, during which Lehman Brothers collapsed.

The FCIC will report the survey’s findings to Congress on 15 December.

In a recent HFMWeek survey on US financial reform, 70% of respondents said they were concerned by new powers for the SEC. No-one registered fears over the bill’s record retention requirements for private funds. Only 18% of respondents picked US regulation as the biggest challenge facing the global hedge fund industry.