WEST PALM BEACH, FL (HEDGECO.NET) – The largest pension fund manager in the United States has established a code of ethics for advisors and fund managers following the recent trading scandals. TheCalifornia Public Employees Retirement System [CalPERS] released a statement saying that all external managers and consultants must abide by the new provisions if such companies would continue to dobusiness with CalPERS.
The new standards, according to CalPERS, should address the recent mutual fund trading scandals; including short-term trading and other improper actions, which according to CalPERS threaten the �security of CalPERS members’ assets.�
The new codes, according to CalPERS, would require asset managers and consultants doing business with the firm to report on a bi-annual basis their adherence to the new stipulated standards, beginning on Dec 31, 2004.
The managers and consultants would also be required to designate officers to handle �potential conflict of interest allegations.� In addition, all such companies are also required to detail out all �soft dollar use,� and verification of adherence of these new provisions would require the services of an independent third party auditors the statement said.
The new code was put together with the assistance of 66 managers and advisors according to CalPERS; the objective among others is to ensure an equitable and fair asset allocation system.
Sean Harrigan, the president of CalPERS explained that such standards were adopted after the termination of existing contracts with Putnam Investments, one of the companies implicated in the mutual fund scandals. Harrigan said, “We have a responsibility to ensure our managers follow the industry’s best practices – and this code will help accomplish that.”
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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