Investors would be required to pass an online exam before investing in complex or risky products under a proposal by Greg Medcraft, the chairman of the Australian Securities and Investments Commission.

Medcraft told The Australian Financial Review he believes existing disclosure documents are no longer effective and new technology and innovative approaches are needed to protect investors.

Investors would be required to take "e-learning module" tests that could take up to two hours. The tests would examine investors' knowledge of financial products including margin loans, contracts for difference, derivatives and hybrid securities.

Potential investors could be shut out for 30 days if they failed the exam, which would have password protection to stop cheating.

"We have to start thinking about tools for investors which are not just disclosure," Medcraft told the newspaper.

"PDS [product disclosure documents] are not working for some [investors] and often it is not because they don't understand, they just don't have time. We are in a world where everyone is busy and I think we just have to start thinking more creatively."

The ASIC proposal follows the collapses of Banksia Securities, Trio Capital and MF Global, which hit many investors hard.

To read the entire article from Cara Waters at Smart Company.com.au, click here.

Or read this related article from Business Spectator here.

(Reuters) - U.S. asset manager Legg Mason Inc (LM.N) said on Thursday it will buy Fauchier Partners, one of London's oldest fund-of-hedge-funds firms, from BNP Paribas Investment Partners (BNPP.PA), the latest deal in the fast-consolidating sector.

Opalesque has revealed the number of new Hedge Fund launches declined and Fund liquidations increased in the third quarter. The number of single-manager Hedge Funds has increased to record levels whilst Fund of Hedge Fund numbers have fallen back to 2005 levels.

The squeeze on management and performance fees continued with the average management fee falling to 1.56% and the average performance fee falling to 18.62%. Ongoing pressures relating to increasing regulatory burdens, market uncertainty and competition have made conditions difficult for some managers; particularly given 51.85% of funds covered by Fund Monitors have been below their high water marks for 6 months or more as of October 31.

For full Opalesque article click here.

The following is an article from Citiwire Global and provides some interesting reading...

Fund: Marlborough Special Situations

Kicking off our top ten best performing managers over the last ten years is renowned UK equity manager Giles Hargreave.

The Citywire AAA-rated manager has been running the £496 million (€615 million) fund since 1998 and focuses on the UK's small cap equity sector.

The UK-domiciled fund currently has industrials as its top sector allocation, accounting for 30% of its assets, followed by consumer services (18%) and tech (16.4%).

His current top holdings are tech group Anite and industrial firms RPC Group and Ashtead Group.

Note: All performance data is over ten years to the end of October 2012 and in euro currency terms. Only managers who have been continuously running their fund over the last ten years and outperformed their benchmark according to the Citywire database were included in this analysis.

If you would like to read the entire artilce and view the Citiwire Global graphs, please click here.

Close to $1 billion dollars worth of new Australian equities mandates have been handed out by industry superannuation fund VicSuper as part of an investment overhaul.

AllianceBernstein, Perpetual, Tribeca Investment Partners, SG Hiscock and Vinva will now run actively managed Australian equities for VicSuper, which funded the new mandates by taking money away from passive Australia equities mandates run by BlackRock and the SSgA Australian SAM Sustainability Fund.

All the mandates are worth $165 million each, except Vinva's which is worth $330 million, and collectively they represent approximately 10% of VicSuper's total funds under management.

VicSuper only used BlackRock and the SSgA Australian SAM Sustainability Fund for its Australian equities investments and the decision to fund the new ones through a drawdown was not performance based, Oscar Fabian, VicSuper chief investment officer told Financial Standard.

"These new mandates had to be funded from somewhere. We didn't have a great deal of choice as there was only two," he said.

To read the entire article by Ben Collins at Financial Standard, please click here.

BLINK and you'd have missed it. Cautious investors have been cowering in cash while the more adventurous types have sought out high-yielding defensive stocks.

But in the past six months a change has taken place on the Australian stockmarket. Companies typically classified as cyclical, relying on a strong economy to increase earnings, have come to life and are rocketing higher.

The benchmark All Ordinaries Index has registered a 12 per cent gain since bottoming out in early June this year.

The high-yielding defensive darlings of the market continued to perform strongly in this period, with Telstra clocking up a 21 per cent capital gain, Commonwealth Bank rising 24 per cent, Westfield 15.9 per cent and Tatts 16 per cent.

LONDON—At least six hedge-fund firms announced plans to close in November and two more joined the list this week, underscoring the shakeout hitting the industry from uncertain markets, tighter regulation and what some fund managers say are investors with ever-shorter time horizons.

Some funds were hit by large requests from investors for cash, but others were just struggling to make money, fund managers and industry consultants say.

"If you look at the managers that have closed, there is not much commonality," said Michele Gesualdi, a fund manager at Kairos Partners, a fund of funds firm that invests in a range ...

To read the entire article from The Wall Street Journal, click here.

Report highlights the dangers of adopting a piecemeal rather than systematic response to changing compliance

Following a wave of regulations coming out of Europe and the US in the past two to three years, research into the Australian investment funds industry has found that local firms have limited awareness of the full impact of the regulatory reforms and that many are lagging behind their European and US contemporaries in adjusting to the new requirements. Furthermore, although the compliance changes have significantly increased the need for reporting, many firms continue to struggle with data that is distributed across multiple systems.

The findings are contained in 'Impact of Global Regulation on Australian Investment Managers', a research report based on interviews with senior executive management representing local investment funds firms.   The report was prepared by specialist investment management consultancy, Investit, and sponsored by SimCorp, a leading provider of investment management software and services for the global financial services industry.