AIMA PUBLISHES UPDATED GUIDE FOR SELECTING A PRIME BROKER

Date: Monday, December 8, 2014
Author: AIMA Press Release

AIMA PUBLISHES UPDATED GUIDE FOR SELECTING A PRIME BROKER

London – 8 December 2014: The Alternative Investment Management Association (AIMA), the global hedge fund industry association, has published an updated guide for hedge fund managers to use when selecting a prime broker.

AIMA’s Guide to Sound Practices for Selecting a Prime Broker incorporates changes to the regulatory framework that affects the relationship between managers and prime brokers, including reporting requirements and other new measures introduced under the Dodd-Frank Act in the US and Europe’s Alternative Investment Fund Managers Directive (AIFMD) and the European Market Infrastructure Regulation (EMIR).

The Guide, which was drafted by a working group of AIMA members, also reflects the greater degree of due diligence being conducted on prime brokers today and the evolution in the prime brokerage model since the financial crisis.

It includes guidance on appointing a prime broker and issues to be aware of when selecting more than one prime broker, and also highlights the likely impact of future regulatory changes. In addition, it discusses the core services of prime brokers and defines a number of key commercial terms.

The Guide is designed to complement the AIMA Due Diligence Questionnaire for the Selection of a Prime Broker, an updated version of which will be published early in 2015.

AIMA CEO Jack Inglis said: “The manager/prime broker relationship has clearly evolved since the bankruptcy of Lehman Brothers and the wider financial crisis. The regulatory framework within which both prime brokers and hedge fund managers must operate has changed beyond all recognition - putting new pressures on the provision of services, as well as making counterparty risk a core part of every hedge fund manager’s and investor’s consideration. At the same time, hedge funds are now very keen to tap into the competitive advantages of different prime broker offerings.

“For these reasons, it has never been more important for hedge fund managers to fully understand the various issues related to the prime broker relationship and to conduct thorough due diligence before making a selection. We hope that this Guide and the DDQ that it complements will help our members navigate this vital area.”

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AIMA’s Guide to Sound Practices for Selecting a Prime Broker is available to AIMA members via the AIMA website –

http://www.aima.org/en/utilities/no-access.cfm/restrictedGRAid/28E8A812-A0BE-4B4E-9268131C7352C990



For media enquiries, please contact:

Dominic Tonner, AIMA’s Head of Communications

Tel: +44 (0)20 7822 8380

Email: dtonner@aima.org



About AIMA

As the global hedge fund association, the Alternative Investment Management Association (AIMA) has over 1,500 corporate members (with over 8,000 individual contacts) worldwide, based in over 50 countries. Members include hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting firms, investors, fund administrators and independent fund directors. AIMA’s manager members manage a combined $1.5 trillion in assets (as of March 2014). All AIMA members benefit from AIMA’s active influence in policy development, its leadership in industry initiatives, including education and sound practice manuals, and its excellent reputation with regulators worldwide. AIMA is a dynamic organisation that reflects its members’ interests and provides them with a vibrant global network. AIMA is committed to developing industry skills and education standards and is a co-founder of the Chartered Alternative Investment Analyst designation (CAIA) – the industry’s first and only specialised educational standard for alternative investment specialists. For further information, please visit AIMA’s website, www.aima.org.