UK regulators today kicked off a three-month consultation on new proposals to boost disclosure of stakes held in companies through derivatives such as contracts for difference in a development that will make hedge fund operations more transparent.

Enhanced disclosure of equity exposures held through contracts for difference will result in hedge funds disclosing more details of their investment positions. Hedge fund managers have said they typically use contracts for difference simply to avoid paying stamp duty, which would arise if they invested directly in shares - and that they do not object to disclosing their positions held through contracts for difference, provided the disclosure requirement applies to all investors.