Section B - Investment Process and Portfolio Risk Management » 1. Investment Process » 1. Conduct

Provider: MFA

Practice:	Guidance:
1. A Hedge Fund Manager should foster a management environment that appropriately recognizes its responsibility to act in the interest of each Hedge Fund it manages.	1. A Hedge Fund Manager is retained by a Hedge Fund to act as its investment manager. In that capacity, a Hedge Fund Manager has a responsibility to act in the interest of its client, the Hedge Fund, and in the interest of the Hedge Fund’s investors. A Hedge Fund Manager must also act in accordance with its investment management agreement with the Hedge Fund, the offering documents of the Hedge Fund, and applicable law. When a Hedge Fund Manager has more than one client (e.g., other Hedge Funds or managed accounts), it should act in a manner consistent with its fiduciary duties to each client. This requires the Hedge Fund Manager to balance the interests of all client accounts against its own interests to the extent the Hedge Fund Manager’s interests are reasonable and properly disclosed. Such balancing of interests, fiduciary duties, and resulting conflicts are the same as with other asset managers (e.g., private equity firms, mutual funds, etc.).
2. A Hedge Fund Manager should establish policies and procedures designed to: safeguard information related to its Hedge Fund trading activities, as well as information subject to confidentiality obligations, and prevent the misuse of this information (including investor or customer information), taking into account the nature of the Hedge Fund Manager’s business and type of investments or instruments traded.	2. A Hedge Fund Manager’s policies and procedures should address the protection of information relating to the Hedge Fund’s trading activities, as well as the protection of confidential information provided to the Hedge Fund or the Hedge Fund Manager by the Hedge Fund investors and other third parties. In the United States, for example, with respect to individuals who are investors in a Hedge Fund, the Hedge Fund Manager should ensure that its policies and procedures meet the requirements of the SEC’s Regulation S-P promulgated under the Gramm-Leach-Bliley Act. Moreover, a Hedge Fund Manager should establish appropriate information barriers within its firm to effectuate the foregoing.

Practice:

Guidance:

1. A Hedge Fund Manager should foster a management environment that appropriately recognizes its responsibility to act in the interest of each Hedge Fund it manages.

1. A Hedge Fund Manager is retained by a Hedge Fund to act as its investment manager. In that capacity, a Hedge Fund Manager has a responsibility to act in the interest of its client, the Hedge Fund, and in the interest of the Hedge Fund’s investors. A Hedge Fund Manager must also act in accordance with its investment management agreement with the Hedge Fund, the offering documents of the Hedge Fund, and applicable law. When a Hedge Fund Manager has more than one client (e.g., other Hedge Funds or managed accounts), it should act in a manner consistent with its fiduciary duties to each client. This requires the Hedge Fund Manager to balance the interests of all client accounts against its own interests to the extent the Hedge Fund Manager’s interests are reasonable and properly disclosed. Such balancing of interests, fiduciary duties, and resulting conflicts are the same as with other asset managers (e.g., private equity firms, mutual funds, etc.).

2. A Hedge Fund Manager should establish policies and procedures designed to:

safeguard information related to its Hedge Fund trading activities, as well as information subject to confidentiality obligations, and
prevent the misuse of this information (including investor or customer information), taking into account the nature of the Hedge Fund Manager’s business and type of investments or instruments traded.

2. A Hedge Fund Manager’s policies and procedures should address the protection of information relating to the Hedge Fund’s trading activities, as well as the protection of confidential information provided to the Hedge Fund or the Hedge Fund Manager by the Hedge Fund investors and other third parties. In the United States, for example, with respect to individuals who are investors in a Hedge Fund, the Hedge Fund Manager should ensure that its policies and procedures meet the requirements of the SEC’s Regulation S-P promulgated under the Gramm-Leach-Bliley Act. Moreover, a Hedge Fund Manager should establish appropriate information barriers within its firm to effectuate the foregoing.