Hedge Fund’s Next Problem?
Monday, August 20, 2007 - 9:14 am
Hedge fund managers have had their hands full with gyrating markets. The recent blow-ups and near misses have left regulators jittery, and will likely increase scrutiny moving forward.
But the industry might have time to chart a course to self regulation, according to the CFA Institute:
This self-regulatory template, the Asset Manager Code of Professional Conduct, focuses on setting a baseline for compliance, professional conduct and investor protections.
In our experience, self-regulation requires certain components. In the case of hedge funds, it depends on developing an honest and verifiable template that covers client loyalty, trading practices and compliance procedures, as well as a comprehensive process for disclosures, portfolio valuation and performance reporting.
More important, once this framework is set, industry members who are serious about the approach must actually adopt and adhere to the framework — whatever it may be — in its entirety.
The immediate crisis might have passed, but for asset managers, the aftershocks will continue to rumble.
Strict conduct code needed for hedge fund managers
Investment News
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