Reuters – Britain’s financial watchdog is concerned that retail investors can, via the Internet, access hedge funds set up in Germany and so by-pass UK controls on the high-risk products, its chiefexecutive said on Wednesday.
Hedge funds seek high returns through complex and risky investments and for that reason Britain’s Financial Services Authority (FSA) has tried to limit retail consumer access to them.
But in Germany regulators have decided to open up hedge funds to retail investors. Such funds can escape UK regulatory oversight by marketing themselves across the Internet.
Funds packaging themselves in Germany deliberately to exploit such a loophole would make a worst-case scenario, said John Tiner, the FSA’s Chief Executive.
