Hedge funds in Europe have just proposed that they self-police, in an attempt to ward off regulation. They are offering to volunteer information about their holdings, risk management, governance and valuation techniques.

This makes it all the more likely that the same will occur here in the U.S., where the President's Working Group on Financial Markets recently announced it will form two private-sector groups to develop best practices for the hedge fund industry. One of the groups will focus on hedge fund managers and the other, on investors.

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