Prepared by Robert Jones

CFO, Simplex Capital Limited

Hong Kong March 2000

I have answered only those questions which I felt confident answering.

3 Q8 Is the level of guidance provided in IASC standards sufficient to result in a rigorous and consistent application?

I believe IAS needs more robust interpretations (e.g., more frequent and more comprehensive) similar to the interpretations that often support US GAAP. One particular area is fair value. My business is alternative fund management and we trade on behalf of funds swaps, caps, and other otc derivatives where more support on how to measure fair value, with specific examples, would be very helpful. We report to our investors in accordance with IAS.

Another area which is lacking in IASC standards is the industry-specific guidance which often accompanies US GAAP. For example, I would be very grateful if IAS could produce more specific guidance for the fund management industry, including guidance on master-feeder structures which are so common in the fund management industry (e.g., should feeders consolidate masters? should investors consolidate feeders and/or masters? currently I understand from our audit firm, PWC, that US GAAP would most likely not require consolidation whereas IAS would) I understand that US GAAP has specific guidance for investment companies.

I am a big fan of IAS, mainly because by selecting IAS, I believe international investors are more prone to select our services and trust us because we are not supporting any principles or guidelines from any particular jurisdiction. This gives us the appearance of being un-biased and neutral in our selection of accounting methodology, whereas I often feel that if we selected US GAAP as our reporting framework, we could be perceived as trying to coerce our investors into believing that US GAAP is better than their home country accounting principles, or that we are US-focused.

On the other hand, as I mentioned above, I strongly believe IAS needs to address many of the issues which I call "infrastructure issues" that are necessary to support a comprehensive framework of accounting principles. And a good starting place from my perspective would be to beef up the frequency and comprehensiveness of interpretations as well as promulgate more specific industry guidance.