AIMA

18 August 2010

London – 18 August 2010: The Alternative Investment Management Association (AIMA) – the global hedge fund industry association – has urged European Union policymakers to push ahead with reforms of over-the-counter (OTC) derivatives, saying that the benefits will outweigh increased costs.

AIMA, which recently submitted a response to the European Commission’s Consultation on Derivatives and Market Infrastructures, said it wished to see EU policymakers implement the objectives on OTC derivatives that were laid down by the G20.

The G20 has stated that all OTC derivative contracts should be reported to trade repositories, while all standardised contracts should be cleared through central counterparties (CCPs) and, where appropriate and practical, traded on an exchange or electronic trading platform.

AIMA welcomed the fact that the European Commission is likely to mandate central clearing of eligible contracts, and is set to propose harmonised requirements for the establishment and operation of CCPs and trade repositories.

In its submission to the EC, AIMA emphasised that hedge fund managers - significant users of OTC derivatives for investment and hedging purposes – would have to bear significant costs associated with administrative and operational changes the reforms would require.

But AIMA CEO Andrew Baker said: “Managers recognise the need for such reforms and will continue to work closely with policymakers to ensure that reforms and new regulations are well thought-out, coordinated and give due consideration to all the parties active in  the OTC derivatives market.

“This is one of the central pieces of the reform agenda leading to the reduction of systemic risk. If designed properly, all market participants will benefit. Moreover, the whole economy will benefit if the incidence and the impact of future market and financial instability is reduced. This is an important objective we all share.”

- Ends -

For media enquiries, please contact Christen Thomson, AIMA Director of Communications, on +44 (0)20 7822 8380; email – cthomson@aima.org

About AIMA

As the only truly representative global hedge fund association, AIMA, the Alternative Investment Management Association, has nearly 1,200 corporate members worldwide, based in over 40 countries.

Members include leading hedge fund managers, fund of hedge funds managers, prime brokers, investors, legal and accounting firms 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 members’ 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, www.aima.org.

Return to Media Release listing page