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02 December 2009

AIMA expresses concern over proposed threshold for U.S. Systemic Resolution Fund - disproportionately high costs for hedge fund managers

Proposed Financial Stability Improvement Act would subject hedge fund industry to more onerous requirements than other financial institutions. Europe is having a similar debate with AIFMD, ready to impose higher capital requirements on AIF managers.

Andrew Baker, CEO, AIMA said:

‘The Alternative Investment Management Association, as the global hedge fund industry association, supports the efforts of policymakers in the U.S. to tackle systemic risk. We support the reporting of systemically relevant information by larger hedge fund managers to the national authorities in the interests of financial stability.
‘However, we do wish to express our concern over a measure contained in the proposed Financial Stability Improvement Act of 2009, which was just approved by the House Committee on Financial Services, whereby the hedge fund industry would be subject to more onerous requirements than other financial institutions. Under this proposal, the asset threshold for firms required to contribute to the Systemic Resolution Fund – a pool of capital that would be used to rescue firms deemed too big to fail - would be set at $10 billion for hedge funds yet $50 billion for all other financial institutions. The result of this would be to impose disproportionately high costs on hedge fund managers who do not themselves pose systemic risk’.
‘We hope this proposed measure is reconsidered before it becomes law and look forward to working with policymakers on a proportionate and workable outcome.’

© AIMA - Alternative Investment Management Association

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