Hedge Fund Compliance 101

When it comes to working with hedge funds, there are various rules that have to be followed.  This is known generically as hedge fund compliance.  However, there are not as many rules for hedge fund activity as there are for activities of other investment funds, but still some exist that are absolutely crucial for their continued healthy functioning.

Thus, for hedge funds to gain credibility, they need to establish a compliance program.  Within this, an officer is appointed to oversee compliance requirements and the fund’s activities. It is essential the officer keep abreast of the types of clients they can accept, keeping up with advertising laws, and more.  Hedge fund compliance officers come from a wide variety of backgrounds including: law, business and finance.  However, they are at the same time required to have a comprehension of all areas of hedge fund activity as well as knowing how to decipher regulations in full.

For the hedge funds, regulations are helpful as they enable managers to engage in far riskier activities. Vis-à-vis compliance this involves the way hedge funds are able to advertise; how the money invested in the fund is to be handled and more.

About James Cannon

James Cannon is an experienced hedge fund analyst. He has served on the advisory boards for various different Fortune 500 companies as well as serving as an adjunct professor of finance. James Cannon has written for a variety of Financial Magazines both on and off line. Contact James at james[at]businessdistrict.com