Regulatory Environment

Wed Feb 1, 2006


Ripe for regulatory changes


Compared to other hedge fund jurisdictions, South African managers and service providers function within an uncertain regulatory environment. Not only does the lack of clarity compel them to frequently operate within a grey zone, but some believe that the absence of clear regulatory guidelines is holding back a greater expansion of the domestic hedge fund industry. Furthermore, the burden of foreign exchange controls continues to circumscribe their investment strategies.

Industry associations, such as the Alternative Investment Management Association (AIMA), have been negotiating for many years with the Financial Services Board (FSB) to work out a viable framework. After a series of perennial false dawns, there is an increasing sense of optimism that a compromise may be on the near-term horizon. Ian Hamilton, chairman of AIMA, shares the upbeat mood. "My confidence is growing that we are going to sort out many issues this year, and so we are getting very...

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