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June 08, 2005
Sale of Hedge Funds Allowed in Spain
Due to increased pressure from the investor community, Spain has finally decided to authorize domestic sales of Hedge funds. Heightened concern in this regard comes from their experience of Madrid-based brokerage collapse in 2001 where the investors had to incur losses of more than $100 million. Keeping the past experience in mind, even while authorizing sale of hedge funds, some cautions have been put into place. The funds have to publish trading prices at least once in six months. Also, an initial investment of $50,000 to $60,000 by the funds will also be made mandatory under the current plan. Apart from this, it is also stated that the fund managers must be based in one of the 30 mations in the Organization for Economic Cooperation and Development. This is a list of market oriented countries. These rules apply to hedge funds and funds of hedge funds thereby allowing investments using borrowed money equal to five times their worth. International Herald Tribune reports:
"Spain is preparing to let domestic concerns enter the $1 trillion business 19 months after Parliament approved a law permitting hedge funds."
Read More: Spain to permit domestic sales of hedge funds
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