The Alternative Investment Management Association (Aima) has published an enhanced statement of policy principles covering investor protection, regulatory consistency, systemic risk and market integrity.

The paper, Regulating Capital Markets: AIMA’s Policy Principles, sets out Aima's views on improving investor protection, the segregation and protection of investor assets and collateral and calls for regulation reflect the difference between retail and professional investors.

Kathleen Casey, chair, Aima, said the hedge fund industry played an “ever increasing role” in the investment chain: “It is in the deepest interests of the global hedge fund industry that the financial markets on which it operates are well-functioning. This is why we have worked to develop our 2009 platform further, also addressing areas which have not been treated previously.

“This paper therefore presents an enhanced list of principles which Aima supports as part of its overall policy on key issues facing the global hedge fund industry and financial markets in general. It endeavours to explain, not only to the official sector but also to the industry as a whole, our core set of beliefs.”

Aimacalled on policymakers globally to continue seeking a co-ordinated international framework that preserves the cross-border nature of financial markets. The paper also warns about extraterritoriality and regulatory overlap, which it argued would lead to fragmentation and regulatory arbitrage.

To understand and mitigate systemic risk, Aima called for an end to 'too big to fail' and also called for clear and international rules on market abuse, with effective sanctions.

The paper builds on Aima's 2009 Policy Platform that set out the group's views on transparency, global standards, manager authorisation and supervision, its support of aggregated short position disclosure to regulators and policies to reduce settlement failure.