What are the rules of fund management? Should we strictly abide by it?

<p id="isPasted">Fund management rules encompass a wide range of regulations and best practices designed to ensure the responsible and effective management of investment funds. These rules cover areas like investment considerations, risk management, regulatory compliance, and ethical conduct, all with the goal of protecting investors and maintaining market integrity.&nbsp;</p><p>1. Investment Considerations:</p><p>Asset Allocation:</p><p>Fund managers must develop and implement strategies for allocating investments across different asset classes (e.g., stocks, bonds, real estate) based on the fund's objectives and investor risk tolerance.&nbsp;</p><p>Investment Limits:</p><p>Regulations often specify limits on the amount of a fund's assets that can be invested in a single security or asset class to promote diversification and mitigate risk.&nbsp;</p><p>Due Diligence:</p><p>Fund managers are obligated to conduct thorough research and analysis before making investment decisions, including evaluating the financial health and prospects of companies they invest in.&nbsp;</p><p>2. Risk Management:</p><p>Risk Assessment:</p><p>Fund managers need to identify and assess potential risks associated with investments, including market risk, credit risk, and liquidity risk.&nbsp;</p><p>Risk Mitigation:</p><p>Strategies for mitigating identified risks may include diversification, hedging, and other techniques to reduce the potential for losses.&nbsp;</p><p>Performance Monitoring:</p><p>Regular monitoring of portfolio performance is crucial to identify any deviations from the investment strategy or unexpected risks, allowing for timely corrective action.&nbsp;</p><p>3. Regulatory Compliance:</p><p>Adherence to Regulations:</p><p>Fund managers must comply with all relevant laws and regulations, including those related to securities trading, fund structure, and investor protection.&nbsp;</p><p>Reporting Requirements:</p><p>Fund managers are typically required to provide regular reports to investors and regulatory bodies on fund performance, holdings, and other relevant information.&nbsp;</p><p>Transparency:</p><p>Maintaining transparency in fund operations and investment activities is essential for building investor trust and confidence.&nbsp;</p><p>4. Ethical Conduct:</p><p>Fit and Proper Criteria:</p><p>Key personnel involved in fund management must meet "fit and proper" criteria, demonstrating the necessary qualifications, experience, and ethical standards.&nbsp;</p><p>Conflicts of Interest:</p><p>Fund managers must avoid conflicts of interest or disclose any potential conflicts to investors.&nbsp;</p><p>Investor Protection:</p><p>Fund managers have a fiduciary duty to act in the best interests of their investors and protect their assets.&nbsp;</p><p>5. Operational Efficiency:</p><p>Internal Governance:</p><p>Establishing a robust internal governance framework is crucial for ensuring the efficient and compliant operation of the fund management company.&nbsp;</p><p>Cost Management:</p><p>Fund managers must be mindful of costs associated with fund management and strive to operate efficiently to maximize returns for investors.&nbsp;</p><p>Valuation and Custody:</p><p>Proper valuation of fund assets and secure custody of those assets are essential for maintaining investor confidence and preventing fraud.&nbsp;</p><p>These rules and guidelines aim to create a stable and trustworthy environment for fund management, ultimately benefiting investors and the broader financial system.&nbsp;</p><p><br></p>