FSA warned private equity listings will hurt consumers

The Financial Services
has been warned that conusmers will suffer if plans to
make it easier for foreign-based private equity firms to list in the UK are
given the go-ahead.

According to the
, the FSA’s
Financial Services Consumer
is concerned that by relaxing rules for foreign investors
there could be a harrowing repeat of the split capital trust debacle of 2004, in
which 25,000 people lost their money, forcing a tightening of regulations.

Under the FSA’s plans, hedge funds and private equity funds will be able to
list in London if they meet minimum European standards, which are not as
rigourous as the current UK rules.

‘We think that, with its current proposal, the FSA is at risk of making a
serious mistake that will be damaging for investors and the confidence of the
market,’ said the panel’s chairman, Sir John Howard.

Further reading:

More debt would keep FTSE-350 off private equity radar

Wellcome Trust throws support behind private equity

Unions launch campaign for interest relief reform

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