Industry Bodies Support FSA Approach to Hedge Funds

Stephen Harris

28 March 2006

The UK’s Investment Management Association has come out in support of the Financial Services Authority’s recent discussion paper "Hedge Funds: a discussion of Risk and Regulatory Environment". The IMA said it supports the FSA's move away from defining investment products as "wider-range" and "mainstream" towards a more risk-based approach that addresses the complex nature of individual products. The IMA has said it will work with the FSA to "address the definition of risk". "The FSA have listened to our concerns and have produced a sensible document addressing the future of products which use a wider range of investments than traditional authorised funds," said Sheila Nicoll, deputy chief executive of the IMA. She added: "To ensure the success of such products, however, it is imperative that the current UK tax regime is revised as the present system is a major barrier to the domicile of such funds in the UK." The Alternative Investment Management Association has also welcomed the FSA's recommendations for retail investors. AIMA agrees with the FSA that fund of hedge fund managers are best-positioned to select the most appropriate hedge funds for retail investors. The association was pleased that the FSA plans to continue to authorise hedge fund managers in the same manner as other investment managers.