FCA Report Enjoins Hedge Fund Managers to Improve Due Diligence

In a recent report, the U.K. Financial Conduct Authority (FCA) noted that hedge fund managers and other financial advisory firms must improve due diligence of products and services they recommend for their clients. Firms must also appropriately manage conflicts of interest between themselves and their clients. This article details the key points raised in the FCA report. For more on due diligence conducted by hedge fund managers, see “How Should Hedge Fund Managers Select Accountants, Prime Brokers, Independent Directors, Administrators, Legal Counsel, Compliance Consultants, Risk Consultants and Insurance Brokers for Their Funds?” (Jun. 13, 2013); and “Best Practices for Due Diligence by Hedge Fund Managers on Research Providers” (Mar. 14, 2013).

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