Study On The Regulation Of Hedge Funds

The existence and development of hedge funds is the embodiment of capital chasing interest and the internal requirement of low market risk and to improve efficiency ,which has positive significance on financial market development. First, Hedge funds is essentially an investment mean of pursuit of high-return under the control of the risk,the rational use of which does enhance the anti-risk ability of investors;Secondly, the arbitrage of hedge funds are looking for and identify the "market failure" as the basis.In this activities spread will gradually disappear, which will help the market find a reasonable factor price, so that markets tend to be balanced. Thirdly, Hedge funds can enhance the linkage of domestic and the international financial markets and promote the maturation and development of the financial system.while in existence for several decades, through constant remarkable events,hedge funds is proved to have enormous influence on the international financial system and a country's financial system , which makes it become a global concern of financial regulators .In this paper, considering the global financial crisis in 2008, the role of hedge funds taken in this crisis is analysed through theoretical and empirical analysis.The conclusion shows that hedge funds has a dividing role in this financial crisis. On this basis, the author analysis the reason of ineffective regulation,and specific regulatory proposals has been proposed. Finally, the views that how to regulate the development of hedge funds according to china's unique characteristics has been put forward.