According to PricewaterhouseCoopers' sixth annual global hedge fund whitepaper, regulatory pressure will cause the industry to be more transparent to investors about its operational controls. Commenting on the 'Operational Risk: an alternative challenge' paper, Graham Phillips, European hedge fund practice leader, said that current market volatility and uncertainty over operational risks and controls meant that 'the operational control environment must be sufficiently robust to withstand proper scrutiny. 'It remains to be seen whether adherence to this self-certification framework of standards will meet both investors' and regulators' oversight and monitoring requirements,' he added. PwC UK financial services tax leader Robert Mellor, said: 'Recent regulation, US congressional enquiries and pressure to adopt governance standards, have all increasingly challenged investors to consider and understand the tax issues associated with their underlying investment.' Mellor also predicted that the management of tax liabilities would make a move centre stage as the focus by economically challenged tax regimes is increasingly on cross-border capital flows.