DFSA releases draft Hedge Fund Code

Date: Tuesday, July 3, 2007
Author: www.ameinfo.com

The Dubai Financial Services Authority (DFSA) issued today a draft Hedge Fund Code ('Code') for public comment.

Consultation Paper No. 50 and the Code, which are posted on the DFSA website www.dfsa.ae, seek comment on the DFSA's proposals to introduce best practice standards for the Hedge Fund industry in the DIFC under 9 high level principles. This delivers on a promise made by the DFSA to develop such a code in consultation with the industry after the first year of operation of the Collective Investment Funds regime.

Ian Johnston, Managing Director, Policy and Legal Services at the DFSA, said: 'We thought it appropriate to develop best practice standards under high level principles, rather than detailed rules. We selected nine areas of risk which are more specific to Hedge Fund operations than to other types of Collective Investment Funds. This approach is consistent with the DFSA's risk-based approach to regulation and gives the industry the flexibility to develop their own practices within the framework set by the principles.'

The code builds upon the legal requirements applicable to all Collective Investment Funds in the DIFC.

By developing these proposals in line with international best practice, the DFSA is furthering its regulatory objective of ensuring that the DIFC is a well-regulated and internationally competitive financial market.

Comments on the code close on 4 October 2007. Subject to any changes resulting from public consultation, the DFSA hopes to introduce the code in the first quarter of 2008.