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April 02, 2006
Proposed Rule Change For Hedge Funds
With a ‘proposed’ rule change, it might become easier for hedge funds in London to list their shares. This is essentially applicable in case of hedge funds that are transparent about the risks that they take and also publish regular accounts.
This change, if it takes effect, would also lead to greater flexibility in terms of the strategies used. At the same time, it would remove the restrictions on short selling and would allow greater use of derivatives.
Further, in an effort to protect investors, companies would have to ensure that they have sufficient working capital for 12 months. They would also need to elaborate on how investment risks are being spread.
Reuters reports:
The Financial Services Authority (FSA) said the move was consistent with its recent statement that it would consult next year on allowing retail investors direct access to hedge funds. The proposed changes would enable those employing a wider range of investment strategies, including those currently pursued by some hedge funds, to list in the UK for the first time.
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