Hedge Fund Honesty Rule
Hedge Funds Could Face Honesty Rules in EU Laws
The commission, the European Union’s executive arm, has added a provision saying fund managers must act with “honesty, integrity and independence of mind to effectively assess and challenge” senior management decisions, according to the Alternative Investment Management Association.
Fund managers also face tougher rules on protecting client assets, use of debt and conflicts of interest in rules that differ from advice from the European Securities and Markets Authority to the commission, AIMA said.
The draft rules are part of the commission’s work to implement a hedge-fund law from 2011. The legislation, known as the Alternative Investment Fund Managers directive, sets rules on management and information disclosure for funds across the 27-nation region.
While “nobody is disputing the need and the obligation to act honestly,” the underlying hedge-fund law already contains measures that impose that obligation, Andrew Baker, AIMA’s chief executive officer, said in an e-mailed statement today. Source