No change to retail hedge fund regulations, says FSA

The Financial Services Authority (FSA), the main UK financial services regulator, has said it will not change regulations relating to the marketing and distribution of hedge funds to retail investors in the UK.

A discussion paper issued by the FSA late yesterday said the retail sector has demonstrated no significant interest in investing in hedge funds in the UK, nor has there been a particular clamour from hedge fund managers to push their services to retail customers.

Individual hedge fund investors currently have to undergo rigorous testing, relating to their understanding of alternative investments, to achieve accredited status that allows them to invest in hedge funds. Hedge fund managers, meanwhile, cannot directly advertise to retail clients, though there are conduits, such as independent financial advisors (IFA), through which they are able to promote their services to retail investors.

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