Current rules limiting access to hedge fund products by retail investors strikes the right balance b...
Current rules limiting access to hedge fund products by retail investors strikes the right balance between consumer protection and access the FSA today says, which means it will not propose changes to the regime already in place.
The statement comes after the FSA received feedback from the asset management industry to its Discussion Paper 16 published in August last year.
According to the feedback, there was no "great desire on the part of hedge funds or investment advisers to provide or sell hedge fund products as retail products, nor was there evidence of significant demand from retail investors."
Still, the FSA has not completely closed the door on the idea that retail customers might some day be able to buy into hedge funds.
Its statement also says ongoing reviews of the Listing Rules and of Collective Investment Schemes "may have implications for hedge funds" in terms of retail investors.
Further action may also come when the FSA publishes a statement on the responses to its Discussion Paper 17, which is looking at short selling.
Many life companies have blamed short sellers for causing worse stock market falls than otherwise would have been the case in 2001 and 2002, in turn putting pressure on life companies to retain adequate capital reserves.
The FSA says DP17 looks at short selling in particular, not hedge funds, but it is a method of managing assets that is central to the idea of combining long and short positions to hedge risks and therefore a key issue facing hedge fund managers.
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