UPDATE 1-Draft guidelines for wealth funds due in October-IMF

(Adds details, quotes)

By Lesley Wroughton

WASHINGTON, Feb 21 (Reuters) - A first draft of voluntary best practice guidelines for sovereign wealth funds being developed by the International Monetary Fund is expected in October, an IMF spokesman said on Thursday.

IMF Spokesman Masood Ahmed told reporters the IMF's executive board will discuss a preliminary paper of the fund's work on the state-backed wealth funds in March and consider the first draft of the guidelines ahead of the IMF fall meetings.

U.S. lawmakers have said that if the IMF does not move quickly on a code of best practices for wealth funds, to ensure their operations are made more transparent, they will propose laws to force the funds to disclose their U.S. investments in particular.

Ahmed said the March meeting of the IMF's executive board will seek approval from member countries, including the United States, on preparing the guidelines.

"If the board agrees, the next step will be to prepare a framework of voluntary best practices for sovereign wealth funds in close partnership with the funds themselves and other stakeholders," he told a regular press briefing.

"The plan is to present a draft set of these best practices to the executive board ahead of the (fall) meetings in October," Ahmed added.

The IMF was tasked with drawing up the best practice guidelines last year amid growing concerns by major industrial economies about the funds' increasing size and role in world financial markets.