PALM DESERT, Calif. -- The selling of investments to individual investors and their purchases of them are mired in dysfunction, according to the former director of conduct risk and sector leader for asset management of the Financial Services Authority in the United Kingdom.

“It isn’t a real market,’’ Dan Waters said at the outset of a discussion on regulatory reform around the world, at the 2011 Investment Company Institute Mutual Funds and Investment Management Conference here. “It just doesn’t work very well.”

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