Financial Times has reported that a storm of protest from shareholders, politicians, consumer groups and investment trusts has prompted the Financial Services Authority to scrap a light-touch regulatory regime designed to attract hedge funds to list in London.
The financial regulator plans to loosen the main listing rules for funds instead to allow investment vehicles such as hedge funds and private equity to gain a primary listing. These are expected to add many of the key protections missing from the light-touch “secondary” listing rules, including the requirement for an independent board.
The U-turn by the regulator comes six months after it opened up secondary listings to funds in response to the decision by several major funds to list in Amsterdam instead of London. Hector Sants, FSA’s managing director for wholesale, said the new rules will adopt high-level “principles” in line with the regulator’s broad approach of trying to avoid detailed requirements.