In a move that would certainly further delineate access to hedge funds, Britain's securities regulator announced that it is considering allowing everyday retail investors to buy hedge funds-of-funds, The Wall Street Journal reports.
Unlike U.S. markets, those within the United Kingdom have strictly curtailed the sale of hedge fund products to investors outside a realm it describes as "sophisticated" or "high-net-worth." There, hedge funds are reserved for extremely wealthy individuals, institutions and endowments. On the continent, however, everyday investors in Germany, France, Italy and Spain have had access to fund of hedge funds.
The Financial Services Authority said it would spell out its plans in detail in the first quarter of 2007.
"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," said Clive Briault, the FSA's managing director for retail markets. "These onshore funds-of-funds would benefit from the protections already in place for authorized [mutual] funds.
The FSA indicated that it would expect full disclosure from fund-of-funds managers to their investors.
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