WASHINGTON, D.C., November 28, 2006 — Managed Funds Association (MFA) pledged its support of the objectives set forth by 17 major dealers (the “Major Dealers”) for improving equity derivatives industry practices in their November 21^st letter to the Federal Reserve Bank of New York and other relevant regulators.  As part of these objectives, the Major Dealers have committed to working with non-dealer market participants, particularly hedge funds and other asset managers, to develop standardized documentation for equity derivatives.  MFA applauds this commitment.

MFA, headquartered in Washington, DC, is the primary trade association representing professionals who specialize in alternative investment strategies, including representatives from the majority of the world’s largest hedge funds.  Many of MFA’s hedge fund members are active participants in equity derivatives markets and share equally the risks and the responsibilities of investing in derivative products.  Accordingly, MFA looks forward to working with the Major Dealers on the objectives set forth towards achieving higher operational efficiency in these active markets.

MFA in particular commended the Major Dealers’ commitment to automated solutions for standardized products across electronic platforms and looks forward to providing input on the use of various platforms to satisfy this objective.  In addition, demonstrating its support of this process, MFA has two representatives serving on the Depository Trust Clearing Corporation’s Senior Operations Group to make recommendations on these types of automated solutions.

John G. Gaine, MFA President, said, “We applaud the Major Dealers for reaching out to our members for their support in achieving the 2007 targeted objectives for improving market practices in equity derivatives.  We believe it is essential for the Dealers to seek input by hedge funds that are active in equity derivatives markets in order to ensure that the implementation process will work for all market participants.  As with the development of MFA’s 2005 Sound Practices for Hedge Fund Managers, MFA’s current outreach with the Major Dealers on equity derivatives demonstrates the industry’s dedication to improving market soundness.”
 
MFA also said it recognizes that future market evolution may require adjustments in the electronic platform strategy.  In addition, in the interest rate, commodities and foreign exchange (FX) markets, MFA continues to support the growth of standardized documentation and automation, and supports the greater adoption of electronic trade confirmation platforms in both interest rate and commodities markets in order to achieve higher efficiencies across the derivatives industry. 

MFA, headquartered in Washington, DC, is the primary trade association representing professionals who specialize in alternative investment strategies including hedge funds, funds of funds and managed futures funds. MFA’s over 1,200 members are affiliated with the majority of the 50 largest hedge funds, which manage a significant portion of the over $1.2 trillion invested in hedge funds. Since its inception in 1991, MFA has provided industry leadership in government relations, communications, media relations, and education to MFA members and investors.

  
For further information contact:     John G. Gaine
                                                President
                                                Managed Funds Association
                                                (202) 367-1140
                                                JGG@mfainfo.org