Industry Initiatives

MFA leads the alternative investment industry in the development of standards of excellence in business conduct and operational practices that promote viable markets, investor protection and the prevention of systemic risk.

MFA is widely revered as the originator of industry best practices through its seminal guidance, Sound Practices for Hedge Fund Managers, which provides a principles-based approach to strengthening business practices. The Association is also well known for its groundbreaking Preliminary Guidance for Hedge Funds and Hedge Fund Managers on Developing Anti-Money Laundering Programs, which set the standard on AML in response to the U.S. PATRIOT ACT.

As the global derivatives markets continue to expand and increase in volume, MFA promotes robust vigilance among industry participants with respect to operational efficiencies in the global derivatives markets.

Recent initiatives include the following:

3.1.2010		MFA, several buy-side firms, the major swap dealers and other industry trade associations jointly submitted a letter to global regulators, setting out new commitments and targets across asset classes with respect to central clearing, transparency, standardization, operational efficiency and collateral management.  There were two central themes in the letter: (i) increased transparency by the creation and usage of trade repositories; and (ii) expanded usage of central clearing (including the identification of impediments of buy-side clearing and steps to eliminate those impediments).
3.1.2010		MFA, the International Swaps and Derivatives Association and the Securities Industry Financial Markets Association-Asset Managers Group jointly co-published an Independent Amount White Paper, which examines the risk associated with under- and over-collateralization from posting independent amounts and the potential alternatives that may be developed by the derivatives market to protect participants against these risks. This paper is the second edition; the original edition was published on October 20, 2009. The current edition is one of the deliverables described in the derivatives industry letter to the Federal Reserve Bank of New York and other banking supervisors dated June 2, 2009.
6.2.2009		MFA, through its participation in the Operations Management Group (OMG), joined the Major Dealers in presenting a letter to global regulators establishing new commitments to address key concerns in the OTC derivatives markets. In particular, the letter commits that its signatories will maintain support of commercially viable centralized clearing platforms, universally report all OTC derivatives trades and promote sound business practices. MFA issued a press release announcing the new commitments identified in the letter. A plain-language summary and chart of the letter’s commitments were issued by its signatories.
3.31.2009		MFA takes steps to restore investor confidence with enhanced Sound Practices.
10.31.2008		MFA, through its participation in the Operations Management Group (OMG), joined the 16 Major Dealers in presenting a letter to industry regulators that establishes a series of strategic roadmaps and seven high level goals to further improve front-to-back office processing of OTC derivatives and to mitigate risk across the OTC derivatives market. The letter reaffirmed the continued cooperation between the buy-side institutions of the OMG and the Major Dealers in confronting challenges posed by recent market events. The letter also addressed counterparty credit risk concerns by setting forth commitments regarding central counterparty clearing, electronic novation processing and collateral management. MFA issued a press release announcing the new commitments identified in the letter.
7.31.2008		MFA announced that it is joining the 17 major derivatives dealers as a signatory to a letter to global regulators that develops new commitments to improve operational efficiency across OTC derivatives, as well as commodities and foreign exchange markets and collateral management. Click here for a copy of the letter and click here for a copy of the supplement to the letter.
6.16.2008		MFA announced today that it submitted comments on the Best Practices Reports released by the two Committees appointed by the U.S. President’s Working Group on Financial Markets (PWG). MFA's letter on the PWG Asset Managers' Committee Report MFA's letter on the PWG Investors' Committee Report The Asset Managers' Committee Report and the Investors' Committee Report provide guidance for establishing best practices standards for the hedge fund industry and its investors, respectively. The Reports were released on April 15, 2008.
6.9.2008		MFA, ISDA and SIFMA delivered an implementation plan that they developed jointly to help enable buy-side market participants to operate consistently with the relevant goals outlined in the March 27th letter to the New York Fed. The implementation plan consists of three fundamental strategies: (1) communication and education, (2) facilitation and use of electronic confirmation and novation platforms, and (3) electronic confirmation matching improvement. Click here for a copy of the implementation plan. Click here for the Summary of the 2008 Industry Commitments. Click here for the final agenda for the MFA, ISDA and SIFMA live session.