Wednesday, April 15, 2020 02:25 PM / by IOSCO/ Header
Image Credit: Investopedia
The Board of the International Organization of Securities Commissions (IOSCO) today published its Report on the Fifth IOSCO Hedge Fund Survey, which provides regulators new insights into the global hedge fund industry and the potential systemic risks this industry may pose to the international financial system.
IOSCO's biennial survey has become an important resource for regulators to help address gaps with regard to public and global data on hedge fund activities. The survey facilitates the systematic collection and analysis of hedge fund data, enabling regulators to share information and observe trends regarding trading activities, leverage, liquidity management and funding in the global hedge fund sector.
The report explains the results of the fifth IOSCO survey and provides an overview of the hedge fund industry based on data as of 30th September 2018. Since the first survey was conducted in 2010, data collection has expanded due to enhanced regulatory reporting regimes in some jurisdictions.
This fifth iteration of the Hedge Fund Survey also provides valuable data on measuring leverage in hedge funds. Similar to previous editions, the survey collected data related to such things as fund liquidity, collateral, margin, and exposures, all of which offer further insights into the potential impact of fund leverage.
For the first time, this edition provides a jurisdiction-level breakdown of information on long and short exposure on an asset-class basis and several specific leverage metrics, including Gross Notional Exposure (GNE) and GNE Adjusted, as recommended in IOSCO's December 2019 Recommendations for a Framework Assessing Leverage in Investment Funds.
The latest survey report makes several important observations: