The Dubai Financial Services Authority, which regulates all banking and asset management at the Dubai International Financial Center, on Tuesday issued a draft hedge fund code and is seeking public comment.

The proposed code is more in line with the British principles-based approach to financial regulation than it is with the U.S. rules-based approach.

“We thought it appropriate to develop best practice standards under high level principles, rather than detailed rules,” said Ian Johnston, managing director of policy and legal services at the DFSA. “We selected nine areas of risk which are more specific to hedge fund operations than to other types of collective investment funds. This approach is consistent with the DFSA's risk-based approach to regulation and gives the industry the flexibility to develop their own practices within the framework set by the principles.”

Comments on the code are due Oct. 4. Subject to any changes resulting from public consultation, the DFSA hopes to introduce the code in the first quarter of 2008.

Original Documents:

• The (Proposed) Hedge Fund Code Of Practice
• Consultation Paper No. 50