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More complex funds industry 'needs tighter regulation'

THE funds industry in Ireland is becoming more and more complex, leaving less sophisticated investors at sea and needing greater regulation than ever, according to the Central Bank's head of supervision for the industry.

Speaking at an Irish Funds Industry Association event yesterday, the Central Bank's director of markets supervision Gareth Murphy warned that regulation was becoming more necessary for the sector.

"More and more I can see that less sophisticated investors – whether retail or otherwise – will struggle to unravel the risks and complexities of some products (that are regulated by the EU directive on Undertakings for Collective Investment in Transferable Securities (UCITS)).

"Mindful of this, and the potential for regulatory reform to address these concerns, we saw the revisions to our non-UCITS rule book as a genuine opportunity to create a regulated non-UCITS product which might be more appropriate for more complex funds that are currently being authorised under the UCITS framework," he said.

Ireland has become a centre for the funds industry in recent years, and the sector has a huge presence in the International Financial Services Centre, employing thousands.

Irish Independent