The UK’s financial services watchdog has stated that it is discussing proposals to grant access to hedge fund investments, a realm that has been a very important for institutional investors, for retail investors.
The Financial Services Authority (FSA) plans to conduct a public consultation in 2007 on broadening the range of funds that can be marketed to retail investors.
Under the proposals, retail investors would gain access to the new authorized funds of hedge funds, enabling them to invest in products that are regulated by the FSA as authorized collective investment schemes.
The FSA has released a statement noting that funds would be subject to structural and operational safeguards and fund of hedge funds managers will not be able to invest into all hedge funds.
“Retail investors can currently gain access to products with hedge-fund investment characteristics through a variety of means,” said Clive Briault, FSA managing director for retail markets. “Given the reality of the contemporary retail market, it seems sensible to permit the marketing of funds of hedge funds through an authorized, onshore vehicle.”
Briault added that it was important to ensure that consumers were made aware of the particular risks and features of funds and the consultation would cover how best to do this.