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By Christine Gaylican, Opalesque Asia:

The Securities and Futures Commission of Hong Kong has become more stringent in its oversight of hedge fund companies in the island-city.

Hong Kong-based Deacons Financial Services, a financial information services provider, summarised the Circulars issued by SFC in a Private Funds Newsletter issued today, regarding the supervision and risk management of hedge fund companies registered in Hong Kong.

It said that though these are not new requirements. The key point is that the systems, policies and procedures should be well documented and supported by records, which show that they are being followed.

Deacons Financial Services urged hedge fund managers to ensure that their internal control procedures are maintained at the level required by the SFC.

Constant review of risk management procedures

“The SFC does not distinguish between small locally established hedge fund managers and affiliates of large international hedge fund managers. All hedge fund managers need to review their risk management policies and procedures regularly and keep them updated.”

This is especially important during times market conditions are volatile, when new products or services are introduced, when existing products or services are changed, and when other changes occur which could impact the risk exposure of the operations.

Independent staff members assigned for risk management

Deacons fur......................

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