IOSCO conference ends after chalking out a host of guidelines

Mumbai, Apr 12 (UNI) A host of guidelines chalked out for enhancing mutual assistance among global market regulators on key matters like regulation of hedge funds, cross-border cooperation, exchange of finacial information among market participants, issues regarding private equities, and the role of Credit Rating Agencies (CRAs) marked the end of International Organisation of Securities Commission (IOSCO)'s annual conference here today.

Hedge funds, an issue that had acquired significance in recent times and which is a subject of concern for regulators and economies, should be dealt by the tool of ''indirect regulations'', IOSCO technical committee chairman Michel Prada said while addressing a press conference on the concluding day today.

Fund managers are answerable for the proper operation of hedge funds in the market and should be prepared to face the risks, he added.

''Hedge funds should not be demonised. While IOSCO can't insist on a single methodolgy for all the regulators on the issue of dealing with hedge funds, indirect regulation is found to be the appropriate tool to deal with it. Hedge funds, which also appear as good components that brings liquidity in the markets, have been creating embarassment among the players even without bearing significant impacts in the market,'' he said.

To questions on private equities, Mr Prada said IOSCO has established a task force to explore the regulatory risks associated with private equities, an increasingly important component in the capital market. ''There is a whole range of issues related to the private equities like valuation, transparency, and others. We also see hedge funds invest in private equities,'' he said.

On the issue of small and medium enterprises, the chairman said the capital market is not only open to the big companies but also to the SMEs. There is a need for lightening regulations for the SMEs accoding to IOSCO.

The CRAs, which are also equally prominent for the emerging markets, will also be coming under the purview of IOSCO with the constitution of a seperate task force to analyse the role taken up by CRAs in relation to the development of structured finance products.

A task force, chaired by the Security and Exchange Commission of USA, has been set up for the purpose.

''IOSCO has also been engaged in confidential dialogues with certain jurisdictions with which specific cooperation issues have been experienced. The objective of this move is to make genuine improvements in cross-border cooperations,'' he said.

The conference, hosted by the Securities and Exchange Board of India (SEBI) for the first time, was attended by over 500 delegates from more than 100 countries. Several MoUs were signed by SEBI with the market regulators of Indonesia, Taiwan, Thailand and Nigeria on the occasion/.

UNI