UK Treasury Examing Pooling EU Hedge Fund Information

Speaking at a Financial Services Authority conference, UK Treasury minister Edward Balls said he planned to seek the views of other European countries about pooling information and working together on European international regulatory issues concerning hedge funds.

This could signal that the British government is again taking a closer look at hedge fund regulation। He said in his speech, "The first thing to stress is the consensus over the positive role that hedge funds play - providing liquidity, helping markets price assets more accurately and driving financial innovation."

But, "authorities should be vigilant regarding any of the potential risks posed by hedge funds. As the location for around 90% of the EU's hedge fund management business, the UK - and in particular the FSA - has thought hard about getting the regulatory approach to hedge funds right."

Balls said a six-monthly survey of banks' exposures to hedge funds through derivatives, secured financing and prime brokerage, could be enhanced if other regulators shared information about their own banks' exposures to the hedge fund industry. "Following discussion with the FSA, we believe that the quality of prudential supervision of hedge fund activity would be enhanced if there were greater co-operation between the key regulators," he said.

The Treasury minister said he recognized that some experts feared hedge funds were taking increasing risks to generate high returns, but he rejected a more heavy-handed approach to regulation. He also confirmed that the government is looking at issuing shariah-compliant debt, in a move to position London as a global center for Islamic finance and build bridges with the Muslim community.

$1.1 Billion Hedge Fund Deal Goes to Northern Trust

Chicago based Northern Trust has been selected to provide fund administration services to the 816 million Euro (approximately $1.1 billion) hedge fund, BH Macro Limited.

The BH Macro Limited fund, based on the British isle of Guernsey, is one of the first single strategy hedge funds to obtain a secondary listing on the London Stock Exchange under the recently revised listing rules in Chapter 14 of the Financial Services Authority regulations. The single strategy hedge fund will invest in the Brevan Howard Master Fund, a $12 billion hedge fund with a predominant exposure to global fixed income and foreign exchange markets.

Sue Baines of Northern Trust said "We have a long history of servicing more traditional, closed-ended funds with listings in a variety of locations, in addition to being a leading administrator of alternative assets. This combination of expertise has allowed us to support many asset managers taking advantage of the increasing flexibility to list a range of alternative funds, in a variety of domiciles, whether these are private equity vehicles on Euronext, or hedge funds and funds of hedge funds in London. We are delighted to be working with Brevan Howard and look forward to continuing to grow our hedge fund and fund of funds client base."

With $3.8 trillion in assets under management, Northern Trust Corporation is a provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide.