| Area of concern | Issue |
| Disclosure | Investment Policy | Do hedge fund managers describe their investment policies and associated risks with the investments in sufficient detail? |
| Commercial Policy | Do hedge fund managers provide adequate disclosure to investors about the commercial terms applicable to an investment in their fund? |
| Performance Measurement | Do hedge fund managers sufficiently disclose the robustness of their performance calculation? |
| Disclosure to Lenders | Do hedge fund managers provide lenders with sufficient information to assess risk adequately? |
| Valuation | Separation of Duties | Do hedge fund managers adequately mitigate potential conflicts of interest and provide investors with sufficient information about the valuation process? |
| Illiquid Assets | Do hedge fund managers adequately manage challenges arising in valuing assets (including complex derivatives) where reliable market data is not available? |
| Risk Management | Risk Framework | Do hedge fund managers adequately explain their approach to risk management and have a consistent framework in place? |
| Portfolio Risk | In light of recent hedge fund failures, do hedge fund managers adequately monitor portfolio risks to ensure alignment with stated risk appetite and liquidity profile? |
| Operational Risk | Do hedge fund managers ensure adequate management of operational risks (eg stemming from process and system related failures, improper market conduct)? |
| Third Party Services | Do hedge fund managers take sufficient care and conduct adequate due diligence when selecting third party service providers for the fund and continuously monitor them? |
| Fund Governance | | Do hedge fund managers provide a satisfactory mechanism or vehicle to handle potential conflicts of interest as between themselves and investors? |
| Shareholder Conduct | Market Abuse | Do hedge fund managers comply with applicable law and regulation on market abuse? |
| Proxy Voting | Hedge fund managers have become significant participants in equity markets, but do they fulfil their duty to vote proxies where it is in the best interests of investors? |
| Derivative Positions | Do hedge fund managers use derivatives to avoid disclosure of (economic) positions in companies, which, if they owned the stock directly, would have to be made public? |
| Borrowed Stock | Is it appropriate for hedge funds to borrow stock to vote
while not being economically exposed? |