Expressing disappointment with the standard of controls applied by some UK hedge fund managers to mitigate the risk of market abuse, the Financial Services Authority said it plans to step up its programme of inspections to push managers toward adopting improved practices. While the programme of visits to hedge fund managers is part of its measures to deal with market abuse in the entire financial services industry, it has been given greater urgency by the sharp growth in hedge fund assets under management and the sector's growing public profile.

The manager visits would review the controls in place to mitigate the risk of market abuse and to canvass views from within the industry on the areas where managers believe the risks of market abuse are greatest. Though some managers have a high level of awareness and appropriate controls in place, the FSA says in the latest edition of its Market Watch newsletter, 'others were less aware, had fewer controls and demonstrated a complacent attitude to the risks.'

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