The best practices for the asset managers call on hedge funds to adopt objectives in all aspects of their business, including the “critical” areas of disclosure, valuation of assets, risk management, business operations, compliance, and conflicts of interest, the news release said.
The best practices for investors include a Fiduciary’s Guide and an Investor’s Guide. The Fiduciary’s Guide provides recommendations to individuals charged with evaluating the appropriateness of hedge funds as a component of an investment portfolio while the Investor’s Guide provides recommendations to those charged with executing and administering a hedge fund program once a hedge fund has been added to the investment portfolio.
“As we said when announcing these committees – we want the world’s highest investor protection standards; we want to guard against systemic risk and keep the United States the most competitive financial marketplace in the world. As these committees were formed, their Chairmen and the President’s Working Group (PWG) believed that markets benefit when experienced and respected participants develop best practices and new accountability standards,” said Treasury Secretary Henry M. Paulson, Jr., who chairs the PWG, in the release.
The recommendations will be open for public comment for 60 days. The committees then will review and, as necessary, revise the best practices and standards. Comments may be submitted at the Committees’ Web site.
The committees will continue to meet to discuss raising the standards for industry participants after the best practices are complete, the agency announced.
More information about the best practices release is at http://www.treasury.gov/press/releases/hp927.htm .