The Securities and Exchange Commission is broadening its regulation authority beyond the U.S. by approaching more than a dozen London-based hedge fund firms this week.
The New York Times reported that the members of the SEC, which has filed numerous insider trading suits against U.S.-based hedge funds within the last year alone, are paying visits to firms located in London’s Mayfair neighborhood, which is home to some of the city’s largest hedge funds.
Robert Mirsky, partner and global head of hedge funds at KPMG in London, told the Times that the reason the regulator may be examining firms overseas is because it has been “a few years past the Dodd-Frank Act, which in certain circumstances required overseas managers to register with the SEC. With registration comes inspection.”
The SEC has also teamed up with Britain’s financial regulator Financial Conduct Authority to cooperate in overseeing the cross-border operations and activities of managers of hedge funds and other alternative firms.
Britain, the second largest hub of hedge funds in the world, is home to 59 hedge funds with at least $500 million in assets. The U.S., which houses 735 such firms, is the world’s hedge fund capital.