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Hedge-Fund Danger Alert as Canada Prepares for Retail Investors

  • Looser rules would see Canada catch up with U.S. and Europe
  • Investment firms back move but watchdog sounds note of caution
Motion blurred pedestrians crossing sunlit street

Motion blurred pedestrians crossing sunlit street

Source: Getty Images

Depending on where you stand, hedge funds either expose investors to unnecessarily high risks and costs or they give people the opportunity to diversify and profit from volatility.

That’s the basis of a tussle in Canada, where the leading investment-industry watchdog opposes rules that would allow man-in-the-street investors to move into hedge funds and other alternative products such as commodities and derivatives, perhaps as soon as next year. Financial institutions say retail participation is a no-brainer.