Reuters Italia – EU financial market watchdogs have rejected industry requests to allow pan-European Union funds to invest in hedge fund indices, which are often seen as riskier than traditionalassets like stocks and bonds.
The Committee of European Securities Regulators a group of market watchdogs from the 25 European Union member states, examined which new assets could be included in cross-border funds known as UCITS.
Its advice will go to the European Commission for a final decision. UCITS hold investments worth about 4 trillion euros and account for about 70 percent of EU-based funds.
The EU executive wants to give investors a wider choice of assets for inclusion in UCITS to make cross-border saving more attractive and help close the pensions funding gap.
Hedge fund indices are an average of returns from a group of hedge funds and are used to attract more traditional investors such as institutions who want the absolute returns many hedge funds offer.
“Given the complexities of hedge fund indices and the fact that they are still developing, CESR cannot recommend, at this stage, allowing hedge funds indices to be considered as financial indices for the eligibility of UCITS,” CESR said in a statement.
