A few months back, I had the opportunity to read V.
Umakanth's working paper on hedge fund regulation in India
(available on Mondaq and Hedge Fund Law Review). Umakanth, in his
paper sets out a framework for banking and capital market
regulators, the RBI and SEBI respectively, to regulate offshore
hedge funds using a variety of mechanisms- prohibition, disclosure,
registration and regulatory. My general comment on the article was
that the author is advocating regulation even before an industry
takes off.
Fast forward to the current- Lehman's bankrupt, Goldman
Sachs and Morgan Stanley have converted into banks, a $700 Billion
bailout is in the offing, short selling is being banned
systematically from the US to Austria and US Secretary Paulson has
had to make unprecedented TV appearances to calm markets. Of
course, personal appearances are nothing new in India where the
finance minister regularly steps in to make statements for
"pacifying" markets, or the market
