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October 13, 2005
BIS states hedge funds need may require strict regulation in the future
There is a rising concern around the regulation of hedge funds. Although, hedge funds do not pose a systemic risk to the world's financial system but there is a need to look into the way in which they are sold to smaller investors. Since there exposure has been increasing towards the banks credit, there is a need for better transparency measure for a gaining a better control over them. Basel- based Bank for International Settlement's (BIS), General Manager, Mr. Malcolm Knight stated that hedge funds which is the least regulated industry in the financial system do not pose a threat as such, however, a there should be a regulation be in place when the hedge funds target smaller asset holders Reuters Reports:
Until recently, hedge funds had been available only to very wealthy investors but are now able to attract smaller investors after lowering of minimum investment requirements. The Basel-based BIS, which is a forum for the world's central bankers, called for more transparency in hedge funds earlier this year, saying banks' exposure to them was rising.
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