Leading hedge fund managers have formed a working group to review best practice and to examine the application of industry-wide standards where appropriate.
The high-level working group will consult widely and will focus particularly on practices in the areas of valuation, disclosure and risk management. The group will look at existing principles, standards and guidelines, evaluate areas which may require strengthening and suggest solutions which may include adherence to voluntary standards.
This is a UK-based initiative and the working group will be working within the context of the Financial Services Authoritys principles-based environment.
It is supported by the leading hedge fund managers in Europe and has the support of the international trade body for the industry, the Alternative Investment Management Association (AIMA).
Sir Andrew Large, formerly deputy governor of the Bank of England and chairman of the UK financial regulator, will lead the working group.
“Leading hedge fund managers recognize the increasingly important role played by hedge funds in financial markets and the issues raised by supervisors and regulators in relation to the areas of financial stability, investor protection and market integrity,” Large says. “There already exist guidelines and principles in the UK and internationally which we shall look at as part of the review. However, there may be areas that require strengthening.”