The End of the Unregulated Fund

Historically, collective investment funds could be categorized by whether they

operated within or outside the domain of a regulator. Under this widely accepted

taxonomy, retail products were regulated and private or institutional funds were

subject to little or no regulation. With their qualified investor base, alternative funds

including private equity, real estate and hedge funds, historically operated in the

realm of an unregulated market. But now, as a result of a mosaic of new regulations

including the Alternative Investment Fund Manager Directive (AIFMD), Dodd-Frank

and FATCA, alternative funds are emerging from the shadows of their retail fund

counterparts and are the direct and intentional subject of government oversight. With

a few exceptions, there is essentially no such thing as an unregulated collective

investment fund.

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