Hedgeline
WELCOME to HEDGELINE - a publication dedicated exclusively to hedge fund regulation, each month we will provide a summary of the major legal and regulatory developments in hedge fund regulation, both in Europe and key offshore jurisdictions. For those who want to read in more depth, we have also provided links to all relevant materials currently available.
THIS MONTH’S UPDATES ARE:
- U.K. hedge fund working group launches best practice code
- Second Cayman fund fails to escape U.S. bankruptcy jurisdiction
- Switzerland targets alternative investment market with “financial sector masterplan”
U.K. HEDGE FUND WORKING GROUP LAUNCHES BEST PRACTICE CODE
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- Code to Operate on “comply or explain” basis
- Only “unconfirmed” guidance - not endorsed by FSA
- Compliance should help hedge fund managers defend investor claims
- New rule says hedge funds must periodically test compliance procedures
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After a three-month consultation and more than 75 submissions, the U.K. Hedge Fund Working Group (HFWG) last month published its best practice standards for U.K. hedge fund managers. Launching the report, the HFWG urged all hedge fund managers to sign up to the new standards, which are voluntary, and also urged investors to use the standards when conducting due diligence of hedge funds. More
SECOND CAYMAN FUND FAILS TO ESCAPE U.S. BANKRUPTCY JURISDICTION
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- Offshore fund fails to qualify for protection under chapter 15 of U.S. bankruptcy code
- Judge criticises fund’s failure to provide details of its business activity
- Ruling suggests Cayman-domiciled funds may find it difficult to escape U.S. bankruptcy court
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For the second time, a U.S. court has rejected a request from a hedge fund to recognise the Cayman Islands as the proper jurisdiction for insolvency proceedings. Under Chapter 15 of the U.S. Bankruptcy Code, companies based abroad can get protection from U.S. creditors while being wound up. Without this protection, the fund remains liable to lawsuits from U.S. creditors. More
SWITZERLAND TARGETS ALTERNATIVE INVESTMENT MARKET WITH “FINANCIAL
SECTOR MASTERPLAN”
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- Swiss Fund Association pushing for new legal structures for hedge funds and “internationally recognised” supervision
- Also calls for investors’ tax disadvantages to be lifted
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The Swiss Funds Association’ together with the Swiss Banking Association and Swiss Insurance Association’ is working on a Financial Sector “Masterplan” in order to grow its share of the global hedge fund market. Currently, Switzerland boasts around 30 percent of the global fund-of-funds market. More
ABOUT YOUR PUBLISHER, FSI:
FSI is a well known law firm with specialist expertise in relation to enquiries and investigations instigated by the FSA and overseas regulators, including AMF in France and the SEC in the US. Often working in conjunction with compliance specialists and other professional advisers, the team will attend interviews at the FSA, advise on all correspondence with the FSA and represent their clients before the Regulatory Decisions Committee and the Financial Services Markets Tribunal. For further information on how we might be able to help you, please contact head of team, Philip Rubens:
Philip Rubens is head of the financial services team at FSI. Having undertaken a secondment at the FSA, Philip is a leading expert in the regulatory enforcement field.
New additon to
the FSI team
Andrew Wigston
Andrew joined FSI in January 2008 from Lovells. He has a wide range of commercial litigation experience within financial services. His recent work includes a significant negligence claim against a New York law firm in connection with the collapse of a Bahamian hedge fund which went to the Privy Council. Andrew has also undertaken a secondment in the legal department of a Big 4 accountancy firm. He is also a Solicitor Advocate.
Contact Andrew
andrew.wigston@fsilaw.com
+44(0)20 2344 5623
MISSED AN EDITION?
Want to catch up on a previous edition of Hedgeline? Click on the links below
Hedgeline August
Hedgeline September
Hedgeline October
Hedgeline November
Hedgeline December
Hedgeline January