May 13, 2008

MFA Presses for Guidance on Securities Trading Safe Harbor

In a letter to the Treasury and IRS, MFA took the position that an offshore hedge fund’s restructuring of previously acquired debt and workout negotiations in connection with that debt should fall within the securities trading safe harbor, and therefore should not be treated as a US trade or business and should not be subject to US tax.

Institutional Investors Likely to Insist that Hedge Fund Managers Adopt Best Practices

Similar to the response of UK institutional investors to the UK Hedge Fund Working Group’s best practices report, US institutional investors are likely to require hedge fund managers to adopt the best practices embodied in the PWG's private sector committee reports.

“Hedge Fund Due Diligence: Professional Tools to Investigate Hedge Fund Managers,” by Randy Shain; Wiley, 320 Pages

A new book provides a thoroughgoing blueprint for conducting due diligence on hedge fund managers prior to making an investment decision.

KPMG White Paper Summarizes Attitudes of UK Institutional Investor Community to UK Hedge Fund Working Group Best Practices Report

  • According to a KPMG study, UK institutional investors are enthusiastic about best practices standards promulgated by the UK Hedge Fund Working Group.
  • More than half of UK pension fund fiduciaries surveyed indicated that they would require hedge fund managers to comply with the standards within three years, and in the same period UK pension funds expect to double their asset allocations to hedge funds, from 4% to 8%.

New York Insurance Regulator Suggests that “Core” Credit Default Swaps Might be Ripe for Regulation as Insurance Contracts

Eric Dinallo, the New York insurance superintendent, indicated in an interview that credit default swaps in which the protection buyer owns the underlying asset may constitute insurance arrangements, under statutory definitions, and perhaps should be regulated as such.