The International Organization of Securities Commissions, an association of national securities regulators, has begun formulating rules to regulate the hedge fund industry.
There is no timeline for when these guidelines would be completed, and the rules would not bind member regulators.
The decision to investigate hedge funds was reached at an IOSCO summit in Frankfurt where Jochen Sanio, head of German financial regulator BaFin, said that hedge funds pose a threat to the stability of the world's financial system.
His view is by no means universal. Speaking at another conference, Malcolm Knight, general manager of the Bank for