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Alternative Investment Management AssociationAIMA JournalThe Global Forum for the Global Alternative Investment Management IndustryQ3 2010 www.aima.org No. 84We have heard a lot about speculation recently. Whether it has been commodities, the Euro, or sovereign debt, policymakers and self-appointed experts have queued up to attack speculators whose speculation is allegedly ruining markets and bringing down currencies and economies.The rhetoric has been pretty tough. Some leaders talked of Europe being under attack from speculators. During the sovereign CDS crisis there were even reports that the intelligence services of various European states had been told to fnd out who the speculators were. One Greek newspaper reported that the Greek intelligence services had managed to unravel the strands of speculation entangling the country, and that they had identifed the British and American sellers of Greek bonds.Perhaps they would have been better employed looking closer to home. It has since emerged that some of the biggest buyers of protection in the Greek sovereign CDS market were Greek banks. Who were the other big players in Greek debt? French and German banks. In fact 95% of Greek debt is held inside the Eurozone (i.e not in the UK and US). So much for Anglo-Saxon speculation.Its all too easy to attack speculation because it is almost impossible to differentiate between speculation and trading in general. In fact the very use of the word speculation misunderstands the marketplace. Who in the marketplace is not there to proft? Either everyone in the marketplace is a speculator or the distinction is meaningless.Unfortunately, policymakers have used speculators as a scapegoat to be blamed for any ill, regardless of the facts. And nor has their rhetoric been merely empty threats. There have already been very real examples of action taken such as the recent unilateral German ban on naked short-selling. All this matters because when policymakers talk publicly about speculators theyre not talking about all fnancial market participants. Theyre not even talking about the banks. They usually mean us the global hedge fund industry.There is a way to neutralise ignorant and prejudiced attacks like these, and it is education. Making people understand that our industry is not part of the problem, but part of the solution. Showing them that we genuinely contribute to the economies in which we operate and to the global economy as a whole. Not only in terms of delivering returns to investors and price-discovery and liquidity to markets, although that is important, but in real tangible terms that people really understand.Jobs are one important example of that, but perhaps even more important is the social dimension - the industry now is the guardian of many peoples pensions and savings and is the facilitator of their business loans and mortgages. In many instances it is hedge fund activity that enables pension funds, insurers and banks to offer the services that they do because they are niche operators capable of assessing and taking on risks that others are unwilling or unable to undertake.Ultimately the best antidote to attacks on speculation is to demonstrate the social utility of fnancial services in general and our industry in particular. If our industry is perceived by policymakers as rich people using borrowed money to make more money for other rich people then they will not hesitate to impose punitive regulation. If they understand that we are a vibrant, creative and indivisible part of the asset management sector delivering real and important benefts to society, they might think twice.AIMA, as the global industry body, is at the forefront of activities on behalf of the industry to demonstrate the importance and relevance of what we all do. We seek to provide a forum for all communications professionals in the industry to discuss and coordinate messaging so that we can deliver on our mission to educate. Please do contact our team if youd like to be involved. Speculation and social utilityAndrew BakerChief Executive Offcer, Alternative Investment Management Association Address froM the Ceo2 AIMA Journal Q3 2010 CoNteNts Address froM the Ceo SPONSORING MEMBERS OF AIMA1 speculation and social utility Press CLIPPINGs 9International press coverage of AIMA AIMA CoMMIttees 11developments during Q2 with AIMAs main committees ChAIrMANs CoLUMN13Institutionalisation of the industry fIXed INCoMe16seeking relative value at the long-end of the treasury yield curve PIfs 23 Maltas quasi-retail alternative investment structures LAW26US ipso facto and UK anti-deprivation - the Lehman fip clause INstItUtIoNAL INVestMeNt22 hedge fund investment by superannuation funds CoNtACt Us31how to reach us GLoBAL NeWs4 recent regulatory, tax and other developments fX trAdING 18 New platforms enable smaller institutions to explore spot fX PerforMANCe stANdArds 20 how hedge fund managers can claim compliance with GIPs CAIA CoLUMN 7 forming partnerships with top academic institutionsThe AIMA Journal is published quarterly by the Alternative Investment Management Association Ltd (AIMA). The views and opinions expressed do not necessarily refect those of the AIMA Membership. AIMA does not accept responsibility for any statements herein. Reproduction of part or all of the contents of this publication is strictly prohibited, unless prior permission is given by AIMA. The Alternative Investment Management Association Ltd (AIMA). All rights reserved. NeW MeMBers28AIMA members who joined during Q2 2010 ANNUAL CoNfereNCe32AIMA Annual Conference, AGM and 20th Anniversary receptionAIMA sPoNsorING MeMBerCongratulationsto AIMA on its 20th anniversarySimmons & Simmons is proud to be a Sponsoring Member of AIMASimmons & Simmons has a highly specialised international asset management and investment funds team. Across the globe we advise on the full range of legal and regulatory issues for participants in the asset management industry.Acknowledged by the Legal 500 UK directory as the leading firm for hedge funds, the strength of Simmons & Simmons practice has also been recognised in a number of awards including the Funds Europe Award European Legal Adviser of the Year 2006 to 2009 inclusive, The Hedge Fund Journal Award Best Law Firm in 2007 and 2008, Global Investor Awards Legal Firm of the Year in 2008 and 2010 and HFM European Hedge Fund Services Awards 2010 Best Law Firm.To discuss how we can help your business, contact Iain Cullen or your usual contact at Simmons & Simmons.Iain CullenPartnerT +44 20 7825 4422E iain.cullen@simmons-simmons.comsimmons-simmons.comelexica.comPlease note that some of the hyperlinks in this section are restricted to AIMA members.GLoBALG20 leaders issue declaration at toronto summitFollowing their summit in Toronto in June 2010, the G20 leaders issued a declaration of the decisions agreed on the next steps they would take to ensure a full return to growth with quality jobs, to reform and strengthen fnancial systems, and to create strong, sustainable and balanced global growth. They said that their fnancial sector reforms rested on four pillars - the frst of which is a strong regulatory framework, including transparency and regulatory oversight of hedge funds, credit rating agencies and over-the-counter derivatives in an internationally consistent and non-discriminatory way. The G20 leaders also acknowledged the signifcant work of the International Organization of Securities Commissions (IOSCO) to facilitate the exchange of information amongst regulators and supervisors, as well as IOSCOs principles regarding the oversight of hedge funds aimed at addressing related regulatory and systemic risks. They additionally pledged to accelerate the implementation of over-the-counter (OTC) derivatives reforms, and reaffrmed their commitment to see trading of all OTC derivatives contracts on exchange or electronic trading platforms, where appropriate, and cleared through central counterparties (CCPs), by end-2012 at the latest. CPss/IosCo consultationsThe Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of IOSCO published two reports for consultation on applying the 2004 CPSS-IOSCO Recommendations for CCPs to OTC derivatives CCPs, and on considerations for establishing trade repositories in OTC derivatives markets. AIMA submitted this response to both consultations, in which we supported the high-level principles in each report and commended the efforts to establish international standards and seek global coordination amongst national authorities in reforming OTC derivatives markets. Chairman participates in IosCo ConferenceAIMA Chairman Todd Groome participated in a panel discussion entitled Impacts of the Proposed Regulatory Reforms on Unregulated or Less-Regulated Market Segments at the recent IOSCO Conference in Montreal. Other panellists included Tony DAloisio of the ASIC, Malcolm Knight of Deutsche Bank and Timothy Ryan of the Securities Industry and Financial Markets Association.IMf tax proposals The International Monetary Fund (IMF) published a Report (26-page executive summary here) which proposed a Financial Stability Contribution Levy to be paid by all fnancial institutions - including hedge fund managers - and a Financial Activities Tax which would be levied on the sum of the profts and remuneration of fnancial institutions. (See the comm