The UK's Financial Services Authority has said it wants to maintain a "light touch" approach to regulating hedge funds despite evidence of insider trading and market manipulation. Its comments are published in two discussion papers concerning hedge funds and retail investment.

Hector Sants, managing director in charge of the FSA's wholesale and institutional markets division, said: "We have no desire to cause the hedge fund management industry to migrate to more lightly regulated, offshore centres as a result of regulatory action."