Academic

The Hedge Funds Working Group, a British-led endeavor, has come out with both a defense of hedge funds (we hedge! plus we invest in all sorts of asset classes! and so we're safe!) and a list of best practices, to which the funds are invited to sign on.  I say it's an effort to forestall regulation and a disclosure-to-client-oriented approach.  But have a look yourself.

With the markets all ashudder, what do the hedge funds think about their risk obligations?  Here's the HFWG best practice:

A hedge fund manager should put in place a risk framework which sets out the governance structure for its risk management activities and specifies the respective reporting lines, responsibilities and control mechanisms intended to ensure that risks remain within the the manager?s risk tolerance as conveyed to and discussed with the fund governing body.

And it should tell this risk policy to investors.  Hmmm.  It's not exactly Basle Accord style capital adequacy.  But maybe it'll keep the regulators focused on other financial institutions, like French banks with easily circumvented risk analysis software.