Keeping Up with the Joneses: A Model Systemic Risk Reporting Regime for the Canadian Hedge Fund Industry

The purpose of this paper is to suggest a regulatory model by which Canadian securities regulators may monitor the systemic risk contributed to by the Canadian hedge fundindustry The bases for this modelare recent regulatory reform initiatives adopted in the U.S. and Europe. There, securities regulators have adopted Form PF and AIFMD, respectively, to monitor the systemic risk contributed to by hedge funds. However, the features of those regimes are not necessarily appropriate for the Canadian industry. The appropriateness ofthe features of Form PFandAIFMD for the Canadian hedge fund industry is evaluated on two criteria: the average industry fund size, and the cost of regulatory compliance. This paper identifies three features of Form PFandAIFMD that are appropriate for the Canadian hedge fund industry: a minimum size exemption, uniform reporting depth, and extensive data sharing.