MSN MoneyCentral- The London Stock Exchange is preparing to launch a regulation-light market for private equity, property and hedge funds as it battles NYSE Euronext for the lucrative business ofhosting listed alternative funds.
The Specialist Fund Market, to be announced on Thursday, comes after the UK’s Financial Services Authority decided to abolish its nine-month-old light-touch regime for foreign funds listing on the main market – a regime opposed by investment trusts and traditional fund managers.
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However, the exchange is trying to sidestep controversy by describing the new market as for “institutional, professional and highly knowledgeable” investors, so it does not need the same level of regulation as the main list.
The market will apply only the minimum standards imposed by European directives, meaning funds listed on it have a low disclosure burden, do not need independent boards and can sell non-voting shares.
Andrew Wallace, senior manager of the new market, said there were “tens of billions of pounds of value looking for a potential market” and there had already been significant interest from the US.
Hedge fund, private equity and property managers have been rushing to take advantage of booming investor demand to float closed-end funds to provide them with locked-up capital.
