This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Regulatory Drivers Predominant Force Of Change In Next Phase Of Hedge Fund Industry:  Citi Investor Services Survey

Regulation will be the key driver in the next phase of the rapidly evolving hedge fund industry, according to Part II of the Citi (NYSE:C) Investor Services’ 5th Annual Industry Evolution survey.

Previous Citi surveys have discussed key drivers of the industry since the global financial crisis, and throughout this period a broad and significant set of global regulations was being formulated. The complexity and scope of the rulemaking has so far had no real impact on the day-to-day operations of hedge funds. But now, with major implementation deadlines from the overhang of Dodd-Frank, Basel III, EMIR and AIFMD finally upon us, these regulatory drivers will now be the predominant force of industry change.

“As the demands of the new regulatory environment emerge, market leaders need to build out new capabilities, platforms and processes to survive and transform their organizations,” said Sandy Kaul, Head of Business Advisory Services at Citi. “Understanding how this complex regulatory landscape is changing is a vital first step in that process.”

Regulatory Overhang Leads to Financing Overhaul

The exit of proprietary trading from sell-side organizations has allowed key aspects of market-making, inventory management and direct lending to shift from a dealer-dominated activity to one where major hedge funds have a key role in taking on market risk.

Moreover, there is a collateral conundrum in that there are more strategies being executed than ever but less financing available. The pool of collateral that hedge funds control is likely to continue to expand which could lead hedge funds to begin treating collateral as an asset class with which they can supplement their trading book profits.

Optimizing Counterparty Management and Relationships

Hedge funds will need to overcome numerous challenges as the number of collateral pools expand exponentially, further magnified by the introduction of Dodd-Frank and the EMIR OTC derivative rules. To optimize counterparty interactions, new data inputs, analytics and tools will be required to support the effective use of hedge fund collateral assets and efficient deployment of financing positions.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs