On October 29, the Financial Services Authority published issue 24 of its Market Watch Newsletter. The lead article focused on market abuse systems and controls of hedge fund managers (HFMs).
As part of the FSA's ongoing market abuse prevention work, a number of hedge fund managers were visited in order for the FSA to review their market abuse controls. The FSA’s conclusion was stark. “We are disappointed by some of what we saw. We will be following up with the firms visited and are also launching a program of visits to a wider cross section of HFMs over the coming months to formally assess their market abuse systems and controls.”
In the newsletter, the FSA set out their views on the sorts of measures which HFMs should be taking, along with examples of good practice which they found during their first set of visits.