1.  A hedge fund manager should ensure that it has internal compliance arrangements which are designed to identify, detect and prevent breaches of market abuse laws and regulations.

1.  A sound approach might include the following components:

• a dedicated compliance officer who is not involved in the investment management process;
• a written compliance document describing all relevant compliance procedures;
• documentation of all compliance incidents by the compliance officer in accordance with, where relevant, applicable regulatory requirements;
• training/education of investment management and other staff to ensure that the relevant laws and regulations, the relevant compliance procedures and what constitutes inside information are all understood and adhered to;
• the provision of regular compliance reports to the fund governing body;
• seeking legal and regulatory guidance to ensure that compliance arrangements are designed to prevent regulatory breaches; and
• open relations with its regulator.

2. A hedge fund manager should disclose to investors in its own marketing materials that it has a policy to prevent market abuse (no disclosure of the actual policy is required).
[See also Section D1 (1)]

2.  No applicable guidance.