SPECIAL REPORT: GLOBAL REGULATION
Hedge Funds and Service Providers Pose Oversight Conundrum
Will an industry that grew up with few restrictions get caught in regulatory net?

October 2, 2006

By Chris Kentouris, Senior International Editor

In a world where a hedge fund is domiciled in the Cayman Islands, managed from New York, administered in Dublin and has investors in a multitude of jurisdictions, regulators are struggling to find the right balance of oversight to ensure investor protection without stifling hedge funds' freewheeling styles.
The options range from light to heavy-handed. Hedge fund managers prefer the former, saying they can police themselves; some investor advocates say more formal measures are needed to prevent the occasional fiasco or meltdown.
Quote from Iris' Rolf Theisen:
"A lot more needs to be spent by hedge funds on technology if they are going to comply with any regulatory requirements on transparency," says Rolf Theisen, VP of San Francisco-based Iris Financial Solutions, developer of Iris Hedge Fund Manager, a software package for trading, portfolio and position management, trade processing and risk management.
Iris is promoting its Equities Trader and Fixed-Income Trader products, used by a dozen tier-one banks, to hedge funds for trade order execution and management. "While the products were designed for the sell side, hedge fund managers are also seeking industrial-strength front-office systems," notes Theisen.

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