The changes consist in developing a principles-based regulatory approach under which the responsibilities of asset management companies are more clearly defined, and making technical adjustments to the rules to adapt them to developments in the FoHF industry.
The changes in the regulatory framework involve, inter alia, four general principles that replace the previous thirteen eligibility criteria for foreign hedge funds. Asset management companies are reminded of the due diligence procedures they must apply when investing in a financial instrument on behalf of funds they manage. Changes also include specific disclosure in the FoHF prospectus if investment strategies are not sufficiently diversified.
Articles 313-54 and 411-34 of the AMF General Regulation have been amended by an executive order dated 18 March 2008, published in the Official Journal on 30 March 2008. Article 29 of AMF Instruction 2005-02 has also been modified. Further details have been added to section 4.2.2 of the specialised programme-of-operations template for funds of hedge funds (FoHFs), and Instruction 2006-02 (Annex 1) will be supplemented shortly.
The changes follow on from the report of the working group on "Assessment of the French regulatory framework for funds of hedge funds and possible areas of improvement", put out for public consultation between 18 September and 19 November 2007.
The rule changes implement recommendations from the report that fall within the purview of the AMF. Those recommendations that would require implementation by law or decree are under consideration by the competent authorities.
Press release
Report of the working group
Summary of responses
© AMF - Autorité des Marchés Financiers
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