In addition, he says the communiqué does not make it clear what regulation means in this context.

'If indeed, they are pointing to more regulatory capital, who would be required to have the additional capital - the hedge fund manager or the offshore fund.

"European hedge fund managers are already themselves regulated and there are proposals in this regard in the US, therefore is the target simply more disclosure of hedge fund positions given that we have seen many jurisdictions already increase disclosure requirements around short selling and in the UK around the use of CFD's.

'I am sure the industry would welcome a greater explanation of the systemic risks which a hedge fund designated as a "systemically important hedge fund 'poses'.

"Do we create a two tier system of hedge fund regulation? If so does being classed as a 'systemically important hedge fund' become a badge of honour?

"Does this mean that we will see greater regulation and oversight over the mega billion sized long only and private equity funds or are they perceived as not posing any systemic risks?"