WASHINGTON–(BUSINESS WIRE)–Aug. 6, 2003–Managed Funds Association (MFA), the global voice for the hedge fund industry, today submitted its 2003 Sound Practices for Hedge Fund Managers, to theSecurities and Exchange Commission (SEC), according to John G. Gaine, President. MFA, headquartered in Washington, DC, is the trade association representing professionals who specialize inalternative investment strategies including hedge funds, funds of funds and futures funds.

2003 Sound Practices for Hedge Fund Managers is the product of several months of preparation by MFA and its members. The 2003 Sound Practices document builds upon a similar document that was published for the hedge fund industry in February 2000 in response to a recommendation by the President’s Working Group on Financial Markets that hedge funds establish a set of sound practices for their risk management and internal controls. Recognizing the valuable guidance provided by the recommendations contained in the 2000 publication, MFA has expanded and updated those recommendations to address additional topics of importance to the industry such as responsibilities to investors, valuation practices, and business continuity and disaster recovery. In response to the hedge fund industry’s growth over the past few years, MFA has also sought to make the recommendations applicable to a broader range of hedge fund managers and to take account of evolving management practices in the industry.

“In the spirit of cooperation and community, dozens of professional hedge fund managers have worked diligently to issue a new set of sound practices for hedge fund managers in order to address a wider range of topical industry issues, as well as a broader audience,” said Mr. Gaine. “It is our members’ collective belief that the guidance contained in this document, when coupled with the existing hedge fund regulatory structure, provides protection of investors in hedge funds, as well as protection for the marketplace.”

2003 Sound Practices for Hedge Fund Managers contains recommendations that are intended to promote sound business practices in the hedge fund industry and, in doing so, enhance investor protection while contributing to market soundness. The recommendations contained in the 2003 Sound Practices are divided among the following six topics:

— Management and Internal Controls;

— Responsibilities to Investors;

— Valuation Policies and Practices;

— Risk Monitoring;

— Regulatory and Documentation Controls;

— Business Continuity and Disaster Recovery.

The 2003 Sound Practices are being published by MFA in the belief that the most effective form of industry oversight is self-evaluation combined with self-discipline and self-policing. The 2003 Sound Practices emphasize, however, that the wide variety of organizational structures and investment strategies in the global hedge fund industry makes it impossible to take a “one-size-fits-all” approach to sound practices, and consequently, each hedge fund and hedge fund manager should assess the document’s recommendations and apply them as appropriate, based on its particular business model and circumstances. Although certain of the recommended practices described in the 2003 Sound Practices may be aspirational and represent goals that Hedge Fund Managers should strive to achieve, MFA believes this document describes an ideal set of policies and practices that should serve as the reference benchmark for hedge fund industry sound practices.

For a copy of 2003 Sound Practices for Hedge Fund Managers visit www.mfainfo.org.

MFA is the only association representing the interests of investment professionals in hedge funds, futures funds and other alternative investments through effective lobbying and advocacy. MFA’s approximately 700 members manage a significant portion of the estimated $600 billion invested in hedge funds. Since its inception in 1991, MFA has provided industry leadership in government relations, communications, media relations, and education to members and investors.