Dubai Opts for HF “Code of Practice” Over Full Regulation
| Jul 14th, 2007 | Filed under: Hedge Fund Regulation | By: Alpha Male |
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Special to AllAboutAlpha.com by: Timothy Laing, Unicredit
The Dubai Financial Services Authority (DFSA) launched a tactical strike last week in the battle against hedge fund regulation. Aiming to help maintain the “progressive culture of economic development” that predominates in the Dubai International Financial Centre (DIFC), the DFSA issued a proposal for a hedge fund Code of Practice. The proposal includes a consultation paper and a code of practice.
When asked about the approach taken by the proposal, the DFSA’s Ian Johnston said:
We thought it appropriate to develop best practice standards under high level principles, rather than detailed rules. We selected 9 areas of risk which are more specific to Hedge Fund operations.
If this is what hedge fund oversight will look like in the future, then it will be difficult to argue against such proposals, voluntary or otherwise. In fact, these recommendations should fall under the heading of “common sense” first and “best practices” second. One can only wonder what the reaction would have been at the recent G8 summit if, instead of the “Locust” approach, Frau Merkel had come forward with a reasonable and level-headed proposal similar to what the DFSA has put forward.
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