FSA questions industry competence to run complex products

Regulator's annual risk report highlights 130/30 funds as one area groups may have insufficient resources to manage greater risks. By Natalie Kenway

Many investment firms may be launching complex products without the systems or skills to manage and control them, according to the latest FSA annual risk report. It highlights specific country funds, unconstrained portfolios and 130/30 vehicles as particular areas of concern, in terms of charges and risk. Over the past 18 months, the regulator said there has been a trend of equity and bond launches in the retail market taking advantage of Ucits III powers. These products have been making use of hedge funds, derivatives, put and call options, credit default swaps and other sophisticate...