The Authority said in July that it had reviewed the current regulatory regime applicable to such funds, and it considered that the existing requirements were not sufficient to take account of the specific features and risks associated with these types of fund. In the July discussion paper, ESMA examined the possible measures that could be introduced to mitigate the risk that particularly complex products, which may be difficult to understand and evaluate, were made available to retail investors. ESMA also raised the potential systemic risk caused by these types of fund and their impact on financial stability.
ESMA will use the feedback received to this paper to develop draft guidelines for such funds.
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