After days of speculation, the U.K. Financial Services Authority has formally announced that hedge funds are appropriate for retail investors. "Given the reality of the contemporary retail market, it seems sensible to permit the marketing of hedge funds though an authorized, onshore vehicle," Clive Briault, the FSA's managing director for retail markets, said in a statement. Investment will be limited to funds of hedge funds – not expected to happen until late 2007 – and only to those that lock up investor money to less than three months, Reuters reports. Given the current trend, funds like that may be hard to find. The FSA plans to spend a good deal of time between now and then working on solutions to issues such as the fact that consumers generally don't understand hedge funds, confusion over the sales and distribution channels used, and possible risk caused by marketing prohibitions on certain unregulated funds. The agency says it will soon publish a consultation paper on changes to the listing rules for investment entities, designed to provide them with "greater choice in their selection of investment strategies, whilst maintaining appropriate standards of investor protection."