MFA Submits Sound Practice Guidelines To SEC

by Carla Johnson, Investors Offshore.com

11 August 2003

The Managed Funds Association (MFA), the industry body for alternative investment providers and hedge fund professionals on Thursday submitted its 2003 Sound Practices for Hedge Fund Managers to the US Securities and Exchange Commission.

According to the President of the MFA, John G. Gaine, the 2003 Sound Practices document builds upon a similar guide published by the hedge fund industry in February 2000, in response to a recommendation from the President's Working Group on Financial Markets that hedge funds should establish guidelines on risk management and internal controls.

The sound practice guidelines have reportly been updated in order to address additional topics of importance to the industry, and to address the sector's rapid growth over recent years.

However, Mr Gaine stressed that given the wide range of organizational structures and strategies employed by the hedge fund industry, the new guidelines should not be viewed as a 'one size fits all' strategy, and that each hedge fund manager should assess the recommendations and apply them as appropriate.

He concluded by announcing that:

'It is our members' collective belief that the guidance contained in this document, when coupled with the existing hedge fund regulatory structure, provides protection of investors in hedge funds, as well as protection for the marketplace.'

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