The final report by the technical committee of the International Organization of Securities Commission reveals that hedge funds globally lack commonality in a variety of areas. The report, based on a survey process begun in early 2005 – makes four significant conclusions:
- None of the responding members – which include 20 jurisdictions -- have a "formal, legal definition" of the term hedge fund. The report, found, however, that since the 2003 survey, the list of hedge fund characteristics has grown or expanded.
- Hedge funds are regulated in 85% of the responding jurisdictions, with some jurisdictions having "special requirements" for HF advisers.
- Few jurisdictions report any significant "retailization" of hedge funds, though some regulators anticipate a change in the future.
- The extent of fraud reported has been low in some jurisdictions, but vary in others, with some respondents saying their regulatory regime was too new to have any significant data on fraud, while others report that their regulators do not separate hedge fund-related fraud from the pool of fraud activity. Citing some respondents, the report stated that "some regulators perceive a risk of greater fraud in the future as further retailization occurs."
