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The International Organisation of Securities Commissioners (IOSCO) has published its "Final Report on Funds of Hedge Funds". The final report updates the IOSCO Report "Regulatory and Investor Protection Issues Arising from the Participation by Retail Investors in (Funds-of) Hedge Funds" as published in February 2003. The Final Report focuses on the particular regulatory issues arising from the investment of retail investors into hedge funds and provides a description of the general regulatory approaches in relation to funds of hedge funds offered to retail investors.

IOSCO points out that "funds of hedge funds are largely regulated or authorized in the majority of SC5 jurisdictions, the applicable rules being generally based on the regime for traditional collective investment schemes as potentially completed by specific rules", but "nonetheless identifies additional investor protection regulatory issues given that in a few areas, the regulation is either too light if not non-existent, or is too general, which could raise concerns for regulators. This Report therefore proposes to potentially consider further work for the purpose of determining whether guidelines are needed in the particular areas to complete those provided for by the IOSCO 2003 Report and in particular, for the purpose of developing guidelines in relation to the methods that might be utilized by funds of hedge funds' managers in order to deal with the liquidity risk, and the nature and the conditions of ......................

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