UK suffers hedge fund blow

Posted on May 14 2010

FT.com / UK / Business - UK suffers hedge fund blow.

So we have the first conflcit between the Tories - who will wait this essential additional regulation of hedge funds - and Europe.

Europe will be taking new powers. Will that require a referendum in the UK?

And what about the crisis this will cause for the ConDems? Tories vehemently opposed. Vince Cable, presumably, quite in favour.

Interesting times.

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2 Responses

  1. cristina says:
    May 15 2010 at 1:44 am

    Mr Murphy, thanks for your post. Could you explain what this commentator then means when he says:
    “London-based hedge funds may be able to escape the full impact of these new restrictions, because very few of them are – in a legal sense – British or European institutions; most of them are domiciled in the Cayman Islands, to shelter the tax of their investors. So if they insist on retaining Cayman as their official home, they may benefit from a waiver that would enable them to raise money via so-called private placements from professional investors in the UK, though not in the rest of Europe. In other words, the choice facing London based hedge funds, broadly, is to circumscribe where they raise their money or be subject to much more red tape. Which sounds more like an annoyance for them, rather than a disaster – and makes you wonder why Germany, France and the others are bothering”. Is this really the case? Efforts toward bringing transparency and limiting leverage on hedge funds is so easily going to be circumvented?

  2. Richard Murphy says:
    May 16 2010 at 8:56 pm

    @cristina

    I suspect so

    That’s the British way

    We after all honed the secrecy jurisdiction

    Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.