With investors burned by the conflagration of Portus Alternative Asset Management within its borders, Ontario may be just months away from introducing hedge fund regulation into the Canadian province, according to Investment News. The provincial government is putting pressure on the Ontario Securities Commission to do something soon, or “we will act on it,” Minister of Government Services Gerry Phillips said in an interview with Bloomberg News, expressing hope that a little rule-making will do the trick. Phillips, says IN, is eager for “a framework...to allow hedge funds to be widely sold to the public.” Already there are rules governing accredited and institutional investors. While that could open a huge marketing opportunity for the burgeoning Canadian hedge fund industry, new provincial regulations could present a prickly problem for hedge funds, but even potentially more for Ontario. Ontario, it turns out, is not part of Montreal-based Canadian Securities Administrators “passport” system whereby all other provinces recognize the regulations of one another. So, unhappy hedge funds could migrate to one of the commonwealth’s other financial centers, which could be a blow to Ontario cities like Toronto. On the other hand, the other provinces could jump on the retail reg bandwagon. “It is premature to speculate,” CSA spokesman Eric Alberro told IN. “But the regulation of hedge funds is a preoccupation of all members.”
