Hedge funds are increasingly significant participants in European, American, and other developed markets. They contribute to improve trading, price discovery and innovation processes as well as enhance liquidity in many different financial and other assets in both developed and emerging markets.

Hedge funds have brought significant benefits to the financial markets. At the same time their explosive growth has raised concerns amongst supervisors and regulators as to whether increased attention might be required to address issues of systemic risk, investor protection and hedge fund activism in the market for corporate control. Hedge funds, although not subject to product regulation, are like other market participants subject to general conduct of business norms, including market abuse rules.