On 22 January, the Hedge Fund Standards Board published a set of best practice standards for hedge fund managers. The publication of the final standards follows a consultation period which commenced in October 2007 when Sir Andrew Large's Hedge Fund Working Group published a consultation document containing proposals for the new code of conduct.

The standards require, among other things, heightened levels of disclosure, risk management and governance for hedge fund managers. Adoption of the standards is voluntary, and they will apply to those fund managers who choose to sign up on a "comply or explain" basis. On their launch, 14 of London's largest and leading fund managers adopted the standards, including Gartmore, Marshall Wace, GLG, Man Group, Lansdowne and Sloane Robinson.

The Hedge Fund Standards Board will act as "custodian" of the standards going forward with a mandate to monitor (but not enforce) compliance with the standards, ensure that the standards are kept up-to-date and examine opportunities for convergence with standards produced in other jurisdictions (notably the US where the President's Working Group is expected to publish similar standards shortly).

Herbert Smith provided advice to the HFWG on a number of legal and regulatory issues concerning the report's best practice standards and other related issues.

A copy of the Hedge Fund Working Group's Final Report including the full text of the Standards is available online at  http://www.hfsb.org/?section=10564.