Hedge fund managers told to focus on business continuity practices
The Managed Funds Association’s 2003 ‘Sound Practices For Hedge Fund Managers’ recommends that BC is treated as a high priority.
The Managed Funds Association (MFA), the global voice for the hedge fund industry, has submitted its 2003 ‘Sound Practices For Hedge Fund Managers’, to the US Securities and Exchange Commission (SEC).
Sound Practices for Hedge Fund Managers is the product of several months of preparation by MFA and its members. It builds upon a similar document that was published for the hedge fund industry in February 2000 and aims to establish a set of sound practices for hedge funds’ risk management and internal controls. The 2003 guidance expands and updates the 2000 document and, for the first time, includes business continuity and disaster recovery advice.
The recommendations contained in the 2003 Sound Practices are divided among the following six topics:
* Management and internal controls;
* Responsibilities to investors;
* Valuation policies and practices;
* Risk monitoring;
* Regulatory and documentation controls.
* Business continuity and disaster recovery.
The business continuity and disaster recovery advice is as follows (verbatim):
Hedge Fund Manager should establish a business continuity plan that includes practices to ensure, to the greatest extent practicable, that appropriate personnel will have the ability to monitor a Hedge Fund’s existing portfolio positions and execute transactions where necessary in the event of a market emergency or other severe market disruption.
