Definition Of ‘Hedge Fund’ Under Review In Australia
By Damien Hatfield on Jul 22, 2013 in Australian Hedge Funds
ASIC has received industry submissions seeking to refine the definition of ‘hedge fund’. There are concerns the current definition affects a number of funds that do not exhibit the same risks to investors as ‘true’ hedge funds.
A hedge fund is currently defined as…
- promoted as being a ‘hedge fund’, or
- exhibits two or more of the following characteristics…
- complexity of investment strategy or structure
- use of debt
- use of derivatives (subject to limited carve-outs)
- use of short selling, or
- has rights to charge a performance fee.
Hedge funds are (generally) precluded from using the shorter product disclosure statement (PDS) regime and have higher disclosure benchmarks to improve investor awareness of product risks.
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