AIMA urges authorities to make public aggregated data from regulatory reports

17 Sep, 2014

Data obtained from regulatory filings such as Annex IV under the Alternative Investment Fund Managers Directive (AIFMD), Form PF and Form CPO-PQR, should be aggregated and made publicly available, according to the Alternative Investment Management Association (AIMA), the hedge fund industry body.

“In our view, the single biggest benefit we as an industry could have from systemic risk reporting is obtaining some of the data back in the form of aggregated information similar to what the UK Financial Conduct Authority’s (FCA) Hedge Fund Survey does so that any potential policy intervention and discussion around it can have a meaningful foundation,” said Jiri Krol, head of government and regulatory affairs at AIMA in London.

The Securities and Exchange Commission (SEC), which receives Form PF, has published an aggregate report, and presented its findings to Congress in 2013, although it was not as detailed as what is published by the FCA. The National Futures Association (NFA), a self-regulatory body, is responsible for digesting the Form CPO-PQR and supplies the information to the Commodity Futures Trading Commission (CFTC). The CFTC is reported to be creating a data warehouse to hold this information in conjunction with its Office of Data and Technology. It is not known if the CFTC will aggregate this information and make it available.

Krol criticised intergovernmental agencies for publishing reports and consultations on the asset management industry without making public the data behind their conclusions or guidance. “The recent Financial Stability Board (FSB)-International Organisation of Securities Commission (IOSCO) consultation in January 2014 on the criteria to identify systemically important funds or managers has been conducted in the dark, without all the involved regulators and central banks or the general public having access to aggregate data about the industry as regards size, leverage, liquidity profile or other key risk measures,” said Krol.

The FSB-IOSCO consultation stated mutual funds, money market funds, exchange traded funds, hedge funds, private equity funds and venture capital funds were all potentially in scope for being designated non-bank, non-insurance systemically important financial institutions (NBNI SIFIs). The paper recommended materiality thresholds be used to identify SIFIs. It suggested a threshold of $100 billion in assets and an alternative threshold of between $400 billion and $600 billion in gross notional exposure to identify hedge funds it believed constituted SIFIs.

This recommendation incurred the wrath of AIMA, alongside other industry groups including the Hedge Fund Standards Board (HFSB) and the Miami-based Hedge Fund Association (HFA). Blackrock and Brevan Howard, the world’s third largest hedge fund manager with around $40 billion in assets, have both railed against the proposals, pointing out the methodology employed by IOSCO and the FSB is flawed.

fund managershedge fundsAIMASECCFTCForm PFAIFMDAnnex IVFSBIOSCOBlackRockBrevan HowardHFSBHFANFAForm CPO-PQR