The Financial Services Authority has proposed the banning of promotions of Unregulated Collective Investment Schemes to retail investors.
This means the products will be restricted to sophisticated investors and high net worth individuals for whom the products may be most suited.
The UK UCIS retail market is estimated to be worth £2.5bn and 85,000 retail investors have direct holdings in these investments which can include timber, fine wines, crops and unlisted shares. However, the FSA found three out of four sales were unsuitable.
UCIS can be promoted to retail investors if advisers first assess the product's suitability, however this ban would mean they could not be promoted even in the context of financial advice.

Problems have occurred due to pensioners being advised to invest all their wealth in a single UCIS to generate income and customers being advised to borrow money to invest in a UCIS and service the debt with withdrawals from that investment.
Gavin Stewart, acting director of policy, risk and research at the FSA, said: "Product risks can be much greater on UCIS and similar products than on more mainstream investments and we have found the majority of retail promotions and sales fall a long way short of our existing standards.
"This is important because it is exposing ordinary investors, for most of whom these products are clearly unsuitable, to significant potential for large losses on what are often esoteric or illiquid investments.
"This situation needs to change and so we are acting now to prevent these products being marketed to ordinary retail investors in the future."