11 December 2007 — DFSA Issues its Hedge Fund Code of Practice
The Dubai Financial Services Authority (DFSA) today issued its Hedge Fund Code of Practice (Code), the first of its kind to be issued by a regulator and a landmark code in the regulation of the international Hedge Fund industry.
The Code sets out best practice standards for Operators of Hedge Funds in the Dubai International Financial Centre (DIFC).
The DFSA’s initiative to issue a Code of Practice comes in the wake of enhanced industry and regulatory focus on Hedge Funds. The Code addresses some specific risks that are associated with Hedge Funds and reflects the DFSA’s commitment to risk-based regulation.
The issuance of the Code follows several months of consultation with industry professionals and international regulators who were invited to comment on the proposed rules and offer their opinions on the Code of Practice.
There are nine high-level principles in the Code, which cover areas of key operational, management and market-related risks, particularly in the areas such as valuation of assets, back office functions and exposure to market risks.
David Knott, Chief Executive of the DFSA said: “While there are a number of industry-based Hedge Fund Codes, the DFSA’s Code is the first of its kind to be issued by a regulator. Having received highly positive feedback throughout the consultation period, we are confident that the Code will provide investors and Hedge Fund Managers with a backdrop for the successful development of Hedge Funds in the DIFC by ensuring the industry has the necessary regulations in place to prosper. This initiative reflects our commitment to the continued development of the DIFC as an attractive and well-regulated environment for Hedge Fund Operators and prospective investors.”