A Hedge Fund Manager’s senior management should be involved in the compliance program and appoint or hire an individual to develop and monitor compliance with all applicable laws, rules and regulations by the Hedge Fund Manager and the Hedge Funds it manages.

For purposes of these Recommendations, the individual who is appointed or hired to develop and monitor legal compliance is referred to in this section as the “chief compliance officer”.

The chief compliance officer may be a member of the Hedge Fund Manager’s personnel, may serve in this capacity alone, or as one of several areas of responsibility.  The selection criteria for the chief compliance officer should include seniority within the firm, knowledge of investment and trading strategies and business operations for each Hedge Fund managed by the Hedge Fund Manager, and familiarity with applicable legal requirements.

For a SEC-registered Hedge Fund Manager, the Advisers Act requires that the Hedge Fund Manager designate a chief compliance officer to administer its policies and procedures, and that this person meets certain criteria as set forth in the Act.

A Hedge Fund Manager should ensure that the chief compliance officer has the internal and external resources to carry out his or her duties and actively monitor and ensure that the Hedge Fund Manager and its Hedge Funds comply with U.S. and international laws, rules, and regulations applicable to the Hedge Fund Manager’s business and the Hedge Fund Manager’s activities.

A Hedge Fund Manager’s chief compliance officer should be involved in all aspects of the compliance program, including preparation of policies and procedures, as well as compliance monitoring. A Hedge Fund Manager should give consideration to the reporting lines of the chief compliance officer and establish reporting lines that are adequate to help ensure appropriate involvement of senior management in the development of policies and procedures and compliance monitoring.