UK still 'bad for hedge funds'

FSA rules that permit UK onshore quasi-hedge funds will have little effect on the industry unless complementary tax changes are introduced. That was the response of many industry figures to the FSA's relaxation of investment restrictions that will allow shorting, the extensive use of derivatives and leverage of up to 100% of net assets. Paul Sater, partner at Ernst & Young, said: "While the FSA is very gung-ho about regulation, the Inland Revenue has not changed its tax rules. Until they adopt a complimentary regime, it is almost impossible for new onshore hedge funds." If the Inland Rev...