Hedge Fund Reader : White paper outlining compliance rules for hedge fund managers

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September 17, 2005

White paper outlining compliance rules for hedge fund managers

SEI Investments, a provider of global asset management services has come up with a white paper outlining the top issues to be resolved by hedge fund managers so as to ensure compliance with the SEC hedge fund law which will be rolled out in February 2006. According to insiders the new SEC law will be more than a compliance requirement and would involve stricter rules being clamped across hedge fund operations. The new white paper involves a study of the cardinal rules for compliance and identification of areas requiring special attention. Issues addressed in the paper include those revolving around conflict of interest, development of fair and equitable trade allocation practices, timely resolution of trade errors etc. The governing body has also prescribed a new code of ethics which encompasses issues such as short selling, trading of restricted stock etc. The white paper was written to help hedge fund managers make a smooth transition from pre to post SEC ruling. The whiter paper gave a sneak peek into the new SEC ruling which the white paper claims would be much more than a paperwork requirement. Hedgeco.net Reports:

According to the White Paper, Hedge Funds must also develop trade allocation practices, which must be "fair and equitable" to each client over time. Consistency is important and exceptions, in the rare instances that they occur, should be documented and disclosed. They must also implement good policies for handling trade errors, and must avoid using soft dollars to compensate brokers for absorbing losses.

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September 17, 2005 in Regulation | Permalink