Hong Kong to require hedge fund disclosure

What are the long-term implications for the asset management industry as a whole?

Hong Kong's Securities and Futures Commission is expected to release draft rules next week that will require hedge funds marketing their product to local retail investors to disclose information about their operations.

According to sources familiar with the situation, the draft envisages a high degree of regulation - one that is alien to the hedge fund community globally.

The implications of this have led some market participants to wonder why Hong Kong's regulators would take a radical step. This view speculates that disclosure rules for hedge funds may be a trial balloon for heightened regulation of the traditional mutual fund market in Hong Kong.

Hong Kong is a small jurisdiction. Regulators here tend to benchmark...

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