MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Regulatory Trends
Hedge Funds
The Fund Manager of a Hedge Fund is responsible for ensuring that risks
associated with the Fund are adequately managed by:
o Ensuring that the inherent risks in managing the funds are
adequately addressed including having segregation of duties
between the Fund investment function and the Fund valuation and
custody functions;
o Observing the requirements that relate to the appointment of prime
brokers which include that they should meet DFSA’s Eligible
Custodian criteria and that their identity and remit, particularly in
relation to use of the fund’s assets as collateral, is limited and
disclosed as required by DFSA rules; and
o Observing all the best practice standards and guidance issued by
the DFSA, in particular, the DFSA Hedge Fund Code of Practice.
Private Equity Funds
These are generally Exempt Funds and taking account of the practices and
associated risks, the Fund Manager of an Exempt Fund:
o If the Fund has made alternative arrangements which include the
appointment of an Investment Committee of at least three
independent experts, the Fund Manager is not required to appoint
an Eligible Custodian in respect of the Fund’s assets, so long as
these alternative arrangements are adequate.
o Must make certain disclosure in its Prospectus relating to how the
Fund’s assets are held.
Property Funds
All Property Funds (i.e. Funds investing predominantly in real estate or real
estate-related assets) must be closed-ended Funds.
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