The change in Hong Kong regulation to allow sales of some hedge funds to retail investors, a reform that is also under consideration at the U.S. Securities and Exchange Commission, is about to face even more relaxation, as securities regulators there are preparing to approve an even wider use of this increasingly popular investment vehicles, The Wall Street Journal reports.
Since this $1 trillion industry's launch, generally attributed to the late 1940s, hedge funds have been historically designed as investment pools for high-net-worth individuals and various institutions. This was until regulators in Hong Kong and Singapore started approving hedge funds for common folks. As of today, Hong Kong has approved 13 hedge funds for retail investors, while Singapore has given the green light to four. By type, about a half them are the Funds of Funds.
Hong Kong Securities and Futures Commission is expected to codify and simplify the approval criteria for practicing retail, including omitting of the five-year experience prerequisite for hedge fund managers.
Despite the newly open window of investment opportunities, the general public in Asia have not yet invested any significant amounts of in hedge funds. Partly, this can be explained by the shady image of the industry regular investors have and general reluctance of banks and brokerage firms to market the new funds to clients.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.