On July 13, the London Stock Exchange (LSE) announced the launch of a new Specialist Fund Market (SFM) for alternative investment funds which target non-retail investors. The SFM will be subject to a “light touch” regulatory regime and is targeted at specialist funds that are seeking a quotation on a regulated market. The SFM will be a “regulated market” for the purposes of EU law. Funds admitted to the SFM will therefore be required to prepare a prospectus meeting the requirements of the EU Prospectus Directive – the so-called directive minimum requirement.
This development dovetails with the Financial Services Authority’s revised proposals for the listing of investment entities covered in the July 20, 2007 edition of the Corporate and Financial Weekly Digest. The requirements of the SFM regime will be similar to the Listing Rules chapter 14 proposal withdrawn by the Financial Services Authority. The FSA’s withdrawn proposal would have applied to funds directed at retail investors unlike the SFM which will target professional investor funds only.
The SFM regime will be lighter touch than the chapter 15 Listing Rules regime which will apply to funds aimed at retail investors.