Alternative Investment Management Association
24 September 2008
Hong Kong, 24 September 2008 - The Hong Kong arm of the Alternative Investment Management Association (AIMA) - the representative body of the global hedge fund industry - has commended the Hong Kong Securities and Futures Commission (SFC) for maintaining its existing short-selling rules.
“The Hong Kong government has shown leadership in its decision to allow the continuation of normal trading activities, including covered short-selling, in the Hong Kong equities market,” said Christophe Lee, AIMA Hong Kong’s Chairman.
“The SFC’s regulation and stance preserves international investors’ confidence in the integrity and standing of Hong Kong’s markets.”
Short-selling has been widely acknowledged by regulators and governments as a legitimate component of orderly financial markets, adding market liquidity and assisting in efficient price discovery.
In their understandable efforts to restore financial stability, several regulators around the world have recently issued emergency bans on short-selling, which AIMA doubts will achieve the intended results. These measures have the potential to lead to unfortunate consequences, including an increase in the cost of capital for banks, at a time when it is most needed, and incorrect pricing of index products, with negative implications for mainstream retail products.
AIMA has urged regulators to review their restrictions on short-selling at the earliest stage and continues to offer its support towards achieving stability for international financial markets.
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AIMA, the Alternative Investment Management Association, has over 1,280 corporate members worldwide, based in 47 countries. Members include leading hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting services and fund administrators. They all benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals and its excellent reputation with regulators, worldwide.
AIMA is a dynamic organisation that reflects its membership’s interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry’s first and only specialised educational standard for alternative investment specialists. For further information, please visit AIMA’s website at www.aima.org