UK regulator sees no need for more regulation

The UK’s Financial Services Authority (FSA) said recently it did not see the need for more regulation of hedge funds, and that most funds had so far weathered recent financial turmoil fairly well.

"I ... recognise there is pressure for more regulation in a rather general way," FSA Chief Executive Hector Sants told the Hedge 2008 conference.

"I don't particularly think more regulation is needed, but I do think more effective regulation is needed."

His comments come after a number of industry commentators have called for more regulation of hedge funds, which tend to be less transparent than mutual funds.

Sants also said funds were surviving the crisis better than other parts of the financial industry. “Hedge fund managers in general are weathering the market turmoil pretty well in the circumstances, certainly versus other components of the financial services industry." However, he added he expected more funds to fail.

His comments came as the $1.7 trillion (1 trillion pound) hedge fund industry faces its toughest challenge to date.