Martin Crutsinger
April 15, 2008 - 11:50 a.m.

WASHINGTON (AP) - Two advisory groups assembled by Treasury Secretary Henry Paulson proposed new "best practices" Tuesday for the hedge fund industry, designed to improve and clarify the operations of the giant pools of capital.

The guidelines call on hedge fund managers to improve their operating procedures in such areas as disclosure, valuation of their assets, risk management and guarding in provision for conflicts of interest.

One set of the recommendations was prepared by hedge fund managers and the other set was put together by investors who use the funds. Paulson aforesaid the recommendations would send "a strong message that heightened vigilance is necessary and appropriate and that all stakeholders have an important role to play."