The U.K.'s Financial Services Authority certainly seems to be warming up to hedge funds. Not only has the regulator given its endorsement to hedge funds for retail investors, it is proposing a rule change that would make it easier for them to list in London. Among the proposed changes, Reuters reports, are greater strategy flexibility, lifting the restriction on short selling, and permitting greater use of derivatives. There are some catches, however. Hedge funds would have to publish regular accounts of their risk spread and have “sufficient working capital for 12 months,” says Reuters. In other words, retail investors may be able to sink their dough into single strategy funds – and not just funds of hedge funds as earlier announced – as long as the hedge funds listed as closed-end funds on public stock exchanges, the FSA’s Dan Waters told Bloomberg News. In a related development, the FSA is contemplating whether to ease some of its stronger disclosure requirements for all investment firms to align itself with other European Union member states and improve capital market transparency in the EU.
