It is commonly observed at the global level that hedge funds are "opaque" – that is, information about their portfolios is typically limited and infrequently provided. The information a fund provides may also vary considerably depending on whether the recipient of the information is an investor, a counterparty, a regulatory authority, or a general market participant.
From a policy perspective, transparency to investors is largely an issue of investor protection, which, in turn, depends on the nature of investors. The need for counterparties to have adequate information is a risk-management issue. Concerns about hedge fund opacity and possible liquidity risk have motivated a range of proposals for regulatory authorities to create and maintain a database of hedge fund positions.