Brits Continue to Forbid Hedge Fund "Transparency" Measures At G-8 Meeting

June 1, 2007 (LPAC)--German Finance Minister Peter Steinbrueck's report of May 4 that the U.S. Securities and Exchange Commission (SEC) is visibly more open to his view that hedge funds must have more disclosure than the British are, was confirmed to a degree at a panel discussion in New York on May 29, when several former SEC directors, including William Donaldson, Arthur Levitt, and Harvey Pitt, endorsed hedge-fund transparency and supervision. In addition, U.S. pension funds, many of which have invested capital in hedge funds, have grown concerned that their investments are exposed to great risk in these highly-speculative funds.

While the upcoming G-8 Summit (June 6-8) will not not pass any measures on fund control, the German government holds to its view that more than just voluntary standards agreed among the funds themselves was required, that a formal code of conduct should be agreed, at some time. Sources inside the German government have leaked that the British insisted that any reference to the term "transparency" be taken out of the G-8 documents, because in their view, that smelled of "regulation," which the City of London firmly rejects. Because of that, neither the meeting of the 27 EU finance ministers in Berlin on May 8, nor the meeting of the G-8 finance ministers in Potsdam on May 19, made progress on the matter.