Team Hedge Fund

Archive for June, 2009

Euromoney Institutional Investor is planning to launch a new magazine and online offering covering US and international hedge funds in September.

The company’s hedge fund publishing assets include Institutional Investor’s Alpha magazine and Absolute Return magazine, which is published by HedgeFund Intelligence, the world’s leading information source on hedge funds. The new publication will be titled “AR”.

“The new publication will include everything that Alpha and Absolute Return contained, but it will be a new magazine which will contain a lot of editorial that neither magazine does, including new surveys, rankings and high-powered web functionality,” says Euromoney Institutional Investor chairman and Editor-in-chief Padraic Fallon.

“With the hedge fund sector under intense scrutiny from Washington, regulators and investors, this is an excellent time to launch a hedge fund publication,” he says. “Building on the strengths of both Institutional Investor and HedgeFund Intelligence, we have the opportunity to produce the world’s leading hedge fund title which will keep investors, managers, regulators and the whole hedge fund community informed on developments in the sector.”

“Hedge fund performance has recovered strongly in 2009, after the sector’s worst ever performance in 2008, and there are now significant opportunities,” says Michelle Celarier, editor of Absolute Return. “The new magazine is an exciting development because it joins two prestigious monthly magazines that cover hedge funds to create a single authoritative voice. Our mission is to create the most insightful, entertaining and definitive content about the hedge fund industry, in both the printed magazine and online. We will offer readers information they cannot find elsewhere, including news and performance data on thousands of funds, along with in-depth analysis, research and profiles of the biggest hedge funds.”

Advertising will be sold by Christine Cavolina, publisher of Institutional Investor, and the Institutional Investor sales team, led by Joy Desanto.

“AR will provide an unparalleled editorial environment for advertisers interested in the hedge fund industry,” says Cavolina. “It presents the ideal opportunity for companies serving this audience to influence decision-makers and generate new business.”

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Most Read Hedge Fund Law Articles for June

I wanted to take a little time to thank all of the people who read this blog and who take the time to comment on articles or send me questions – your interaction helps make this site more informative and a better resource for everyone.  If you have any questions related to any of the articles, I ask you send them to me through the contact form.  If you have an RSS reader, please consider subscribing to the hedge fund law RSS feed to stay up to date on the new content posted in this site.

Hedge Fund Visitors for June 2009

According to Google Analytics, the following is the information on the number and people who have visited the website during the past month:

• Visits – 14,744  (of these 10,472 were new visitors)
• Absolute Unique Visitors – 11,415
• Pageviews – 33,031
• Top Nations – United States, United Kingdom, India, Canada, Hong Kong, Switzerland, France, Australia, Singapore, Germany

Top 10 Hedge Fund Law Stories for June 2009

According to Google Analytics, the following is a list of the most popular hedge fund articles for the month of June:

• What is a Qualified Purchaser?
• Obama’s New Hedge Fund Regulations
• Finra 5130 Text
• Section 3(c)(7) Hedge Fund
• Start Up Hedge Fund Articles
• Hedge Fund Offering Documents
• Section 3(c)(1) Hedge Fund
• Offshore Hedge Fund
• Start Up Hedge Fund Presentation
• Private Fund Transparency Act of 2009

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Bart Mallon, Esq. runs hedge fund law blog and has written most all of the articles which appear on this website.  Mr. Mallon’s legal practice is devoted to helping emerging and start up hedge fund managers successfully launch a hedge fund.  If you are a hedge fund manager who is looking to start a hedge fund, please call Mr. Mallon directly at 415-296-8510.

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Picking a domain name for your hedge fund website

Start up hedge fund managers always have the difficult task of thinking up a new, good names for their management company and hedge fund (see Naming Your Hedge Fund).  This difficulty is compounded by the fact that the desired name may not be available to use in the state which the management company resides (or with regard to the fund, in Delaware).  An added difficulty is thinking of a name that also has a good available website domain available.

Why Have a Hedge Fund Website?

Website domains are now an integral part of the hedge fund package.  Hedge fund investors are becoming more technology savvy and many communications can be done over the internet or through a website.  This means that the process of setting up a fund can potentially be more demanding (depending on the launch and the needs of the potential hedge fund investors) – not only must managers have all of the back end business operations and legal infrastructure in place, but the manager must also understand, implement and maintain an appropriate web presence.  The foundation for a strong web presence starts with the domain name.

Finding a Hedge Fund Domain Name

While we would all love to have a great one word domain name, it probably is not going to happen (unless you want to shell out a ton of cash).  Even good two word domain names are going to be taken.  To find out if a desired domain name is taken, you can go to any domain agent like www.godaddy.com.  If you search for your domain and don’t find what you are looking for, there are a couple of different options to get a domain you are happy with –

1. Modify your search parameters – if the domain you are trying to get is taken, you can change the wording of the name you are looking for.  If you cannot find a suitable

Company name: XYZ Capital Management, LLC
Desired domain: www.xyz.com  (not available)
Other options: www.xyzcapital.com, www.xyzcapitalmanagement.com, www.xyzcapitalmangementcompany.com, www.xyzcapmanagement.com, www.xyzcapitalmgmt.com, www.xyzcapmgmt.com

For other thoughts on changing the name or spelling, see this Business Week article on company domain names.

2. Buy the desired domain name – if the domain name is taken by a person or a company, you can contact that person or company directly or through a domain agent and try to purchase the domain.  I would expect that for a good domain name it will cost at least $2,000 upwards to $10,000.  Premium names of course can be sold for much higher amounts.  There are also a number of groups out there which domain squat – one group that has a number of hedge fund management company domain names is www.namethat.com.

Other notes

• Price – the domain name will cost about $10 a year from a group like GoDaddy.
• Length of time – I recommend buying a domain name for long period of time.  I would say the minimum length should be 5 years.
• .com or .net? – always go with a .com domain name
• Compliance – there are no compliance issues which jump out at me right away, but I will keep thinking of this issue.  Obviously if you host a website at the domain you will need to make sure that all marketing done is within the rules, see Hedge Fund Website Rules
• Hosting – there are a number of ways you can host your domain name and I will be dealing with this issue in a later article on technology for hedge fund managers

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Please contact us if you have any questions or would like to  learn how to start a hedge fund.  Other related hedge fund law articles include:

• Hedge Fund Manager Blog
• Forex Hedge Fund
• Hedge Fund Investors
• Hedge Fund Logo
• How to raise assets for your hedge fund
• Hedge Fund Disclaimer
• Raising Hedge Fund Capital

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“…, when someone says to you; “I am going to penalize your main industry with economic caps, bankrupt anyone who attempts to use your product and give the money to your competition” it should be a no-brainer. As with the cap-and-trade bill, Rahall and Mollohan delayed in supporting an audit of the Federal Reserve, waiting until it comes to the House for debate. There comes a time when inaction becomes irresponsibility. It is much easier to do the right thing when many others are doing so than it is to take a stand on one’s own. Just ask Ron Paul, he does it all the time!”
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“Taxpayers around the world still face potentially large losses because governments have failed to act quickly enough to remove toxic assets from the balance sheets of key banks, the world’s leading central bankers warn today.”
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“I met Richard Bookstaber at an event recently — very nice guy — and we briefly discussed A Demon of Our Own Design. This week, he discussed The 7 Habits of Highly Suspicious Hedge Funds (The Journal of Investment Management), which he posted on his own blog as a preview.”
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Last week I gave a speech entitled, “Top 5 Hedge Fund Marketing Best Practices” in Boca Raton at a conference put on by Marcus Evans.

Today we are making the first 25 minutes of the speech available via MP3 Audio File Download. This file may be uploaded to your Ipod, saved to your computer or emailed to others on your team. Please always consult with expert compliance and legal advisors before putting in new marketing strategies or materials into place. To receive the download link for this resource please complete your name and email address below:

Related to Top 5 Hedge Fund Marketing Strategies | MP3 Audio Download

1. Marketing to Institutional Investors
2. Hedge Fund Pitch Book Marketing Materials
3. Hedge Fund Business Plan | Plans For Growth
4. Hedge Fund PowerPoint Improvement Tips

Tags: hedge fund marketing, hedge fund sales, capital raising for hedge funds, richard wilson speech, hedge fund marketing audio file download, alternative investment marketing

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IOSCO Pushes Securities Regulators to Adopt Registration Provisions

Over the past few months we have been highlighting the Congressional attempts to regulate and/or register hedge funds and more recently have discussed the Obama hedge fund registration plan.  However, we have not discussed what is happening internationally.  Like the in the US, other major financial centers around the world have suffered from the economic downturn and have begun looking towards greater regulation of the financial system – this of course means greater regulation of hedge funds and registration for hedge fund managers.

There has been much discussion, both in the US and abroad, about world-wide principles for regulation.  There would be obvious benefits for some sort of international standards for all parts of the financial system, but there would need to be an unprecedented amount of cooperation between the various financial regulatory agencies which seems like an insurmountable task.  However, one group, the International Organization of Securities Commissions’ (IOSCO), is doing its best to act as a sort of communicator of best practices that financial regulatory systems should integrate into new regulations which are expected to be proposed in many jurisdictions.

Below I have published a press release announcing the IOSCO’s report on hedge fund oversight.  The full 26 page report, IOSCO Hedge Fund Regulation Report, tackles some of the high level issues which regulatory bodies should consider when drafting new hedge fund regulations.  It will be interesting to see how this report is received in the different jurisdictions throughout the world.

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IOSCO/MR/12/2009
Madrid, 22 June 2009

IOSCO publishes principles for hedge funds regulation

The International Organization of Securities Commissions’ (IOSCO) Technical Committee has today published Hedge Funds Oversight: Final Report which contains six high level principles that will enable securities regulators to address, in a collective and effective way, the regulatory and systemic risks posed by hedge funds in their own jurisdictions while supporting a globally consistent approach.

The report, which was prepared by the Task Force on Unregulated Entities (Task Force), recommends that all securities regulators apply the principles in their regulatory approaches.

The six high level principles are:

1. Hedge funds and/or hedge fund managers/advisers should be subject to mandatory registration;
2. Hedge fund managers/advisers which are required to register should also be subject to appropriate ongoing regulatory requirements relating to:
   1. Organisational and operational standards;
   2. Conflicts of interest and other conduct of business rules;
   3. Disclosure to investors; and
   4. Prudential regulation.
3. Prime brokers and banks which provide funding to hedge funds should be subject to mandatory registration/regulation and supervision. They should have in place appropriate risk management systems and controls to monitor their counterparty credit risk exposures to hedge funds;
4. Hedge fund managers/advisers and prime brokers should provide to the relevant regulator information for systemic risk purposes (including the identification, analysis and mitigation of systemic risks);
5. Regulators should encourage and take account of the development, implementation and convergence of industry good practices, where appropriate;
6. Regulators should have the authority to co-operate and share information, where appropriate, with each other, in order to facilitate efficient and effective oversight of globally active managers/advisers and/or funds and to help identify systemic risks, market integrity and other risks arising from the activities or exposures of hedge funds with a view to mitigating such risks across borders.

Kathleen Casey, Chairman of the Technical Committee, said:

“Securities regulators recognise that the current crisis in financial markets is not a hedge fund driven event. Hedge funds contribute to market liquidity, price efficiency, risk distribution and global market integration. Nevertheless the crisis has given regulators the opportunity to consider the systemic role hedge funds may play and the way in which we deal with the regulatory risks they may pose to the oversight of markets and protection of investors.

“The application of these principles, in a collective, cooperative and efficient way, can provide regulators with the tools to obtain sufficient, relevant information in order to address the regulatory and systemic risks posed by hedge funds.”

The Task Force was chaired by the CONSOB of Italy and the Financial Services Authority of the United Kingdom. It was established in November 2008 to support the initiatives undertaken by the G-20 to restore global growth and achieve reforms in the world’s financial systems.

The Task Force will continue to work to support the implementation of these standards by its members and to deal with future regulatory issues that may arise in relation to hedge funds. It will act as the contact point with prudential regulators and banking standards setters, as well as other regulatory bodies such as the Joint Forum and the hedge fund industry in relation to the development and implementation of industry standards of best practice.

NOTES FOR EDITORS

1. Hedge Funds Oversight – Final Report of the Technical Committee of IOSCO is available on IOSCO’s website.

2. Hedge Funds Oversight – Consultation Report of the Technical Committee of IOSCO was published on 30 April 2009.

3. IOSCO is recognized as the leading international policy forum for securities regulators. The organization’s wide membership regulates more than 95% of the world’s securities markets and IOSCO is the international cooperative forum for securities regulatory agencies. IOSCO members regulate more than one hundred jurisdictions and its membership is steadily growing.

4. The Technical Committee, a specialised working group established by IOSCO’s Executive Committee, is made up of eighteen agencies that regulate some of the worlds larger, more developed and internationalized markets. Its objective is to review major regulatory issues related to international securities and futures transactions and to coordinate practical responses to these concerns. Ms. Kathleen Casey, Commissioner of the United States Securities and Exchange Commission is the Chairman of the Technical Committee. The members of the Technical Committee are the securities regulatory authorities of Australia, Brazil, China, France, Germany, Hong Kong, India, Italy, Japan, Mexico, the Netherlands, Ontario, Quebec, Spain, Switzerland, United Kingdom and the United States.

5. IOSCO aims through its permanent structures:

• to cooperate together to promote high standards of regulation in order to maintain just, efficient and sound markets;
• to exchange information on their respective experiences in order to promote the development of domestic markets;
• to unite their efforts to establish standards and an effective surveillance of international securities transactions;
• to provide mutual assistance to promote the integrity of the markets by a rigorous application of the standards and by effective enforcement against offenses.

MEDIA ENQUIRIES
Greg Tanzer
Direct Line + 34 91 417 5549
Email: g.tanzer@iosco.org
Website: www.iosco.org

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Other related hedge fund law articles include:

• MFA Supports Hedge Fund Registration
• Geither Urges Regulation of Hedge Funds
• Hedge Fund Transparency Act
• Hedge Fund Adviser Registration Act of 2009
• Hedge Funds, Congress and Madoff
• New Investment Advisor Custody Rules Proposed
• NASAA Applauds Obama
• NASAA Supports Hedge Fund Registration

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“After getting some much needed relief in the previous survey, mortgage rates saw little movement this week, according to mortgage financier Freddie Mac.”
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(www.hedgefundlawblog.com)

Meta Trader 4 – Online Forex Trading Platform

Meta Trader 4 is an online trading complex designed to provide broker services to customers at forex, futures and CFD markets.  This is a whole-cycle complex, which means that the trader will not need any other software to organize his/her broker services when using Meta Trader 4. The platform includes all necessary components for brokerage services via internet including the back office and dealing desk.  Currently, over 250 brokerage companies and banks worldwide have chosen this solution to meet their high standards of business performance.

The different functions and options of this system, allow great flexibility in trading. The MetaQuotes Language 4 allows users to incorporate their own strategies through the Expert Advisors, enabling the markets to be monitored automatically so not requiring constant supervision. The standard list of technical indicators may be expanded with the opportunity to add custom indicators as needed,  and real time demos are accessible through more than 35 brokerages free of charge.

Meta Trader 4 attempts to supply the sufficient information and tools in order to make the Forex traders’ decisions more appropriate and easy. The program has a simple and user friendly interface that allows traders to monitor their transactions and their account as well as performing technical analysis and develop Forex trading strategies of their own. In addition, the platform provides continuous real-time information and sophisticated technical analysis tools.

The cost of Meta Trader 4 is substantially lower than the alternative cost of creating a similar product, and is therefore a viable financial proposition to most financial institutions. Installation of the system into the full operational mode will take no more than one day, therefore saving a considerable amount of time for end users.

MetaTrader 4 is a premier business  solution for broker companies, banks, financial companies, and dealing centers. In addition to the points discussed above, the main advantages of the system are:

1.  Coverage of financial markets

• The trading platform MetaTrader 4 covers all brokerage and trading activities at Forex, Futures and CFD markets.

2.   Multicurrency basis:

• The system is designed on a multicurrency basis. It means that any currency can serve as a general currency used in the operation of the whole complex in any country and with any national currency.

3.  Economy and productivity:

• Implemented data transfer and processing protocols are notable for their economy. It makes it possible to support several thousands of traders through a single server with the following configuration: Pentium 4 2 GHz, 512 DDR RAM, 80 GB HDD. New protocols reduce both the demands on datalink and their operational cost.

4.  Reliability:

• In the case of damage to the historical data, the complex has backup and restoration systems. Also, the implemented synchronization allows to restore damaged historical databases within several minutes with the help of another MetaTrader 4 server.

5.  Safety:

• To provide safety, all the information exchanged between parts of the complex is encrypted by 128-bit keys. Such solution guarantees safekeeping of information transferred and leaves no chance for a third person to use it. A built-in DDoS-attacks guard system raises the stability of operation of the server and the system as a whole.
  A new scheme of system working operation was created especially for DDoS-attacks resistance. With its help, you can hide the real IP-address of the server behind a number of access points (Data Centers). Data Centers also have a built-in DoS-attacks protection system; they can recognize and block such attacks. During distributed attacks at the system, only Data Centers are attacked; MetaTrader 4 Server continues its operation in regular mode. Thus, Data Centers increase the system’s stability to DoS and DDoS attacks.
  The implemented mechanisms of rights sharing make it possible to organize the security system with more effectiveness and to reduce the probability of ill-intentioned actions of company staff.

6.  Multilingual support:

• MetaTrader 4 supports different languages, and a MultiLanguage Pack program is included into distributive packages. It provides translation of all program interfaces into any language. With the help of MultiLanguage Pack you can easily create any language and integrate it into the program. This feature of the system will bring MetaTrader 4 nearer to end-users in any country of the world.

7.  Application Program Interfaces:

• MetaTrader 4 Server API makes it possible to customize the work of platform to meet your requirements. API can solve a wide range of problems:

- creating additional analyzers for finding a trend of monthly increase of traders;
- creating applications of integration into other systems;
- extending the functionality of the server;
- implementing its own system work control mechanisms;
- and do much more.

8.  Integration with web-services:

• To provide traders with services of higher quality, the system supports the integration with web services (www, wap). This feature allows real-time publishing of quotations and charts on your site, dynamic tables containing contest results and much more.

9.  Flexibility of the system:

• The platform possesses a wide range of customizable functions. You can set all parameters, from trade session time to detailed properties of financial instruments of each user groups.

10.  Subadministration:

• Subadministration mechanisms allow leading many Introducing Brokers on one server quite easily. For processing all accounts and orders of the clients of your IBs, you will need one server only.

Overall, the newly released Meta Trader 4 platform is equipped to address a full range of account management needs and serves as a user-friendly front-end trading interface for dealings in the Forex, CFD, and futures markets.

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Please contact us if you have any questions or would like to start a hedge fund.  Other related hedge fund law articles include:

• Forex Hedge Fund Articles
• Forex Hedge Fund Overview
• Forex Registration Requirements (please also see our other website on Forex Registration)
• Forex Disclosure Documents Part I
• Due Diligence
• Offshore hedge fund considerations

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