UK hedge fund managers have been given until the end of next month to disclose "side letters" for their funds. A side letter is an agreement giving favourable terms to individual investors.

The Financial Services Authority has given the nod to a guidance note regarding side letters prepared by the Alternative Investment Management Association, the global industry body for hedge funds. Aima said: "The FSA has reviewed the guidance note and confirmed it will take it into account when exercising its regulatory functions."