Albourne Partners and Thomson Reuters have issued a new protocol that standardises how hedge funds collect, collate, and convey risk information.
The Open Protocol Enabling Risk Aggregation (Opera) has been developed in an effort to bring more transparency to the industry and soothe regulatory fears regarding levels of systemic risk.
Developed by an independent working group of 16 firms, including investors, prime brokers, fund administrators and hedge funds, the Open Protocol is designed to help investors aggregate and integrate their exposures, and reduce the proliferation of investor-specific risk formats that hedge funds have to manage.
Henry Knapman, a managing director at UBS, who was seconded to the FSA in 2009/2010 as a senior advisor on hedge fund policy, welcomed the move: "This initiative could not be more timely. As the industry prepares to respond to the ESMA consultation exercise, let us hope that investors, funds, and trade organisations can all rally around this thoughtful solution."