As both the United States takes measures to crack down on money managers in the wake of the Bernard Madoff Ponzi scheme, Canada is already stricter than the United States in a number of regards, says Ronald Kosonic, a partner at the Toronto office of Borden Ladner Gervais LLP who specializes in hedge funds.

Because portfolio managers are required to register with provincial regulators and submit annual financial reports, says Kosonik, the scrutiny of money managers remains greater north of the border. 'If you're managing other people's money, you have to be registered in Canada. There are no exceptions,' says Kosonik.

Furthermore, with new rules likely coming into force later this year, financial reporting frequency will increase as well as the extending of registration to the fund manager responsible for hiring those necessary for fund companies to operate, such as portfolio managers, prime brokers and custodians.