Hedge funds are becoming part of the mainstream. The UK's Financial Services Authority said in March it was proposing to allow funds of hedge funds to be sold to retail investors. The Swiss authorities have announced that banks and securities dealers may sell foreign hedge funds to high net worth investors without a licence.

The FSA's proposals, although welcome, do not deal with the tax treatment of authorised hedge funds. Revenue and Customs is looking into it but there is no indication yet of what its approach may be. It is unlikely that the new rules will be in place until late next year.