Give Hong Kong credit for sticking to its guns, even though it appears to be shooting itself in the foot regarding its hedge funds aspirations. Hong Kong has long been vying with Singapore to be the main HF attraction in Asia, but it may have damaged its future prospects by announcing it would not relax operating requirements for hedge funds. Speaking to a local business group, Alexa Lam, a executive at Hong Kong’s Securities and Futures Commission, said, “We have stood firm, because in the past we have actually come under a lot of criticism, especially as we have a certain competitor down south who, every time they look at us, they will try to bring some competitive issues.” Lam said her agency has come under a lot of pressure from hedge funds to follow Singapore’s example and allow entities with fewer than 30 investors to operate without a license. “We did a lot of soul searching and the eventual conclusion was that the Hong Kong label should be a label of quality,” Lam continued, “and therefore it would really not be in our interest long term to try to race to the bottom just so that we can get the numbers.” Singapore has been trying mightily to attract more hedge funds by its relaxed licensing requirements and a speedier process, but as of late last year Hong Kong still boasted the most hedge fund assets in Asia.
