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Hedge fund regulation in mature capital markets

AIMA Presentation. Hedge fund regulation in mature capital markets. AMAC Annual Conference 2014, Beijing Jack Inglis Chief Executive Officer, AIMA. Contents. About AIMA Industry trends Typical hedge fund structures Regulatory environment Conclusion. About AIMA. AIMA Presentation.

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Hedge fund regulation in mature capital markets

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  1. AIMA Presentation Hedge fund regulation in mature capital markets AMAC Annual Conference 2014, Beijing Jack Inglis Chief Executive Officer, AIMA

  2. Contents About AIMA Industry trends Typical hedge fund structures Regulatory environment Conclusion

  3. About AIMA

  4. AIMA Presentation Industry trends

  5. Historical industry growth Source: Hedge Fund Research

  6. Billion-dollar club Source: HedgeFund Intelligence, December 2013

  7. Historical industry performance

  8. Hedge fund investor base Source: Barclays Capital Solutions, “Waiting to exhale”, January 2014

  9. AIMA Presentation Typical hedge fundstructures

  10. Typical structures Hedge Fund Manager Regulators Service providers (Custodian/ Prime Broker/ Administrator) US taxpayinginvestors Onshore US Feeder Fund (e.g. Delaware) Offshore Master Fund(e.g. Cayman) Non US - US tax exemptinvestors

  11. Hedge fund domiciles Source: Eurekahedge

  12. AIMA Presentation Regulatory environment

  13. Regulatory goals and intensity (pre-crisis) Regulatory intensity Standard market abuse rules Trade transparency in equity markets Removing stock exchange monopolies Basic supervision of participants, activities and products Focus on retail Focus on banks Market Integrity Market efficiency Competition Supervision Financial stability Investor Protection

  14. Regulatory goals and intensity (post-crisis) • Even greater retail protection • Professional investor protection • Market transparency in non-equities • Multilateral trading venues • Data Reporting • Mandated central clearing • & margin for OTC • New banking regulation • SIFI focus • Greater intrusion • New tools and powers • New institutions • Unbundling • Level playing field for exchanges/ dealers • New Participants • Increased Product Scope • Heightened sanctions • Increased enforcement Regulatory intensity Market Integrity Market efficiency Competition Supervision Financial stability Investor Protection

  15. Regulatory impact Hedge Fund Management Company Management and operations T A X Distribution Hedge Fund Markets Trading

  16. Regulatory impact Title IV Hedge Fund Management Company Management and operations T A X FATCA Form PF ELTIF AIFMD UCITS FTT JOBS Distribution Hedge Fund CPO/PQR 40 ACT EMIR BEPS MAD Markets Trading MiFIR Title VII CRD/CRR MiFID

  17. Key areas affected by regulation

  18. AIMA’s role in the reform process

  19. Conclusions Hedge fund industry is heavily regulated in all key mature jurisdictions Industry went through the financial crisis and did not cause systemic problems Regulatory intrusion requires greater operational sophistication and that comes at a cost...... .......But compliance gives institutional investors greater confidence

  20. Jack Inglis Chief Executive Officer, AIMA Tel: +44 (0)20 7822 8380 Fax: +44 (0)20 7822 8381 Email: jinglis@aima.org Web: www.aima.org Contact

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