FSA proposes open-ended retail funds of hedge funds

legislation

regulator looks to provider responsibility as sophisticated products category not viable

The FSA has shelved designs for a sophisticated products category for Ucits III vehicles, opting instead for increased provider responsibility and the allowance of open-ended funds of hedge funds. Such a sophisticated category would have rendered funds using Ucits III powers, as well as splits and structured products, ineligible for execution-only sales. The FSA will continue to scrutinise fund launches that use the wider Ucits III powers as well as the advertising of such vehicles. Proposals published last year looked at the marketing of products that use techniques usually associated...