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2 Jun 2009

MFA Commits to Reduce Systemic Risk in OTC's

Global alternative investment industry voice, The Managed Funds Association (MFA) announced that it is joining the major derivatives dealers (the Major Dealers) in presenting a letter to global industry regulators. The letter establishes new commitments addressing key concerns raised by global legislators such as the G20, European Commission and the U.S. Department of Treasury.

MFA first joined the Major Dealers in presenting a letter to global regulators detailing operational targets and other industry commitments in March 2008.

Today’s letter outlines a firm commitment towards strengthening the over-the-counter (OTC) derivatives infrastructure under the auspices of the OMG and its constituents and partners, including the newly formed Board Oversight Committee (IBOC) of the International Swaps and Derivatives Association (ISDA). MFA is dedicated to continuing its collaboration with global regulators, the Major Dealers, buy-side institutions and service providers to reduce risk and improve market infrastructure and practices across OTC derivatives and other financial products.

Richard H. Baker, MFA President and CEO, said, “ MFA , on behalf of the alternative investment industry, is committed to proactively developing and advancing these critical commitments for reducing counterparty and systemic risks and improving operational efficiency in OTC derivatives processing. MFA fully endorses the collaborative efforts with global regulators to support commercially viable centralized clearing platforms, to universally report all OTC derivatives trades and to promote sound business practices. MFA considers today’s letter to be an important step forward for OTC derivatives markets and looks forward to continuing our participation in the design of future steps.”

MFA and its co-signatories are committed to implementing changes to risk management, processing and disclosure that will significantly transform the risk profile of these important financial markets. The OTC derivatives markets provide important flexibility in terms of products and execution and will benefit from a strengthened infrastructure.

Commitments to reduce systemic risk in the OTC derivatives markets include:

Implementing data repositories for non-cleared transactions in the OTC derivatives markets to ensure appropriate transparency and disclosure, and to assist global supervisors with oversight and surveillance activities.

Clearing for OTC standardized derivative products.

Enabling customer access to clearing through either direct access as a clearing member or via indirect access, including the benefits of initial margin segregation and position portability.

Delivering robust collateral and margining process, including portfolio reconciliations, metrics on position and market value breaks, and appropriate dispute resolution mechanics.

Updating industry governance to be more inclusive of buy-side participants through collaborative partnerships among the Major Dealers, MFA and other trade associations.
Continuing to drive improvement in industry infrastructure, as well as engage and partner with supervisors, globally, to expand upon the substantial improvements that have developed since 2005.

MFA members are professionals in hedge funds, funds of funds and managed futures funds, as well as industry service providers. MFA is headquartered in Washington , D.C. , with an office in New York.

Hedge Fund Expert to Run ATC's Cayman Operations

Ali Mudeen has joined hedge fund provider ATC Group as managing director of its Cayman Islands operations.

Mudeen will oversee and build the firm’s Private Clients and Corporate Services practices in the region, as well as work closely at a group level with ATC’s hegde fund administration practice.

Mudeen brings over 20 years of international experience to ATC, having worked in the US, South America and the Caribbean in banking, legal and trust services. He joins ATC from Caledonian Global, where he was a director and shareholder and had overall responsibility for marketing and business and strategic development.

“Ali’s industry expertise and leadership make him an invaluable addition to the ATC executive team." Robert Govaerts, ATC’s chairman, said, "His broad knowledge base and commitment to client service will significantly enhance ATC’s leadership position in the industry.”

“ATC is an impressive financial services company with a clear vision for the future, having enjoyed strong growth even in these unprecedented economic conditions,” Mudeen said. “I am delighted to join a company which has such a strong focus on client services and on its people.”

Serving international business, private clients, capital markets and alternative investment funds, ATC was established in 1893. ATC employs over 350 professionals in 17 offices across Europe, the Caribbean and the Asia Pacific region.