On the eve of its Australian conference, the global Alternative Investment Management Association has produced a new set of policy principles in relation to the regulation of capital markets, which updates the principles announced in 2009 in response to the global financial crisis.
The four main categories addressed in the new principles are:
- Improving investor protection.
- Enhancing consistency of regulation and maintaining global markets.
- Understanding and mitigation of systemic risk.
- Encouraging improvement in market integrity.
AIMA supports regulatory and legislative structures which protect and enforce investors’ property, shareholder and creditor rights in a fair, equitable and proportionate manner. AIMA has developed and is promoting standardized due diligence questionnaires for both investors and managers. The principles say that retail investors need more statutory protection than sophisticated investors.
The principles warn that micro regulation which does not recognize different risk-bearing capacities could increase homogeneity. “Rules that produce the same responses to economic shocks could aggravate those shocks.”
The principles suggest an end to the “too big to fail” notion.
With respect to fighting “market abuse” the principles are supportive but AIMA says the most effective way to combat market abuse is to target the actual abusive behaviours rather than restricting legitimate activities or the use of certain technologies wrongly seen as proxies for market abuse.
The AIMA Australian Chapter’s conference is at the Sydney Hilton Hotel tomorrow (September 10).