Friday, June 17, 2005
UK FSA On Individuals in HFs
FSA is not poised to support retail hedge funds
Thu Jun 16, 2005 4:41 PM BST
By Tom Burroughes
LONDON (Reuters) - Britain's Financial Services Authority is not poised to support freeing up direct mass market sales of hedge funds as some recent media reports have suggested, a senior FSA official said on Thursday.
The regulator is due to publish discussion papers next week about issues affecting the $1.0 trillion sector (550 billion pound), hoping to shape debate about these fast-growing funds, Dan Waters, sector leader for asset management at the FSA, told an Investment Management Association conference.
He said the FSA was not about to urge a change in the law allowing direct investment in hedge funds by the public.
"The first thing to do is correct the impression that the FSA has decided to open the door to retail investment in hedge funds," Waters said. He did not elaborate on which reports had suggested such a change was on the cards.
Present rules restrict hedge funds to institutions or wealthy individuals able to invest a minimum sum, typically of one million pounds.
Last September the FSA said it was considering hedge fund regulations following steps to free up laws in some other European nations,
Hedge funds have grown rapidly as investors have been attracted by these portfolios' ability to make returns regardless of market movements due to techniques such as short-selling. However, the sector has suffered weak returns in recent months.
The FSA is also carrying out a survey of prime brokers to understand their financial exposure to hedge funds, and also assess the impact of the industry on market stability.
Activities of hedge funds have become a political hot potato in countries like Germany, where there have been calls for tighter controls on these traditionally secretive institutions.
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Thu Jun 16, 2005 4:41 PM BST
By Tom Burroughes
LONDON (Reuters) - Britain's Financial Services Authority is not poised to support freeing up direct mass market sales of hedge funds as some recent media reports have suggested, a senior FSA official said on Thursday.
The regulator is due to publish discussion papers next week about issues affecting the $1.0 trillion sector (550 billion pound), hoping to shape debate about these fast-growing funds, Dan Waters, sector leader for asset management at the FSA, told an Investment Management Association conference.
He said the FSA was not about to urge a change in the law allowing direct investment in hedge funds by the public.
"The first thing to do is correct the impression that the FSA has decided to open the door to retail investment in hedge funds," Waters said. He did not elaborate on which reports had suggested such a change was on the cards.
Present rules restrict hedge funds to institutions or wealthy individuals able to invest a minimum sum, typically of one million pounds.
Last September the FSA said it was considering hedge fund regulations following steps to free up laws in some other European nations,
Hedge funds have grown rapidly as investors have been attracted by these portfolios' ability to make returns regardless of market movements due to techniques such as short-selling. However, the sector has suffered weak returns in recent months.
The FSA is also carrying out a survey of prime brokers to understand their financial exposure to hedge funds, and also assess the impact of the industry on market stability.
Activities of hedge funds have become a political hot potato in countries like Germany, where there have been calls for tighter controls on these traditionally secretive institutions.
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# posted by Tom @ 9:02 AM 
