Foreign Funds Take Center Stage In EU Hedge Fund Debate

Feb 9 2010 | 10:16am ET

The battle over the European Union’s proposed alternative investments regulation has once again shifted to the legislation’s affect on foreign hedge fund and private equity firms.

Last week, the Spanish government—which currently holds the rotating presidency of the EU—again delved into the contentious issue, proposing that funds based outside of the EU should be barred from marketing their services in the 27-nation bloc unless they meet stricter standards than are generally required in their home jurisdictions. That immediately raised hackles once again from the U.K., which opposes vast swaths of the legislation, and also from the European Commission, which drafted the Alternative Investment Fund Managers directive.

The EC proposal is even stricter than the new Spanish bid, insisting on equivalent regulations to those proposed for EU managers.

“The EC has not supported removal of rules on passports for third-country funds,” Christopher Becher, a policy officer at the EC, told an Edhec conference. “We will continue to push for these passports.”

“It’s a matter of a level playing field,” Becher insisted at the French business school. “We don’t want to discriminate against EU managers.”

The Spanish proposal is the third effort to change the EC language. The committee reviewing the legislation in the European Parliament has its own ideas—many, in fact; the proposal attracted about 2,000 amendment suggestions. The Swedish government, which held the EU presidency last year, offered a plan similar to Spain’s, but dropped it amidst opposition from Britain, home to the overwhelming majority of the European alternative investments industry.

The EC proposal would impose strict new reporting and custody requirements on firms, as well as possible leverage limits. Critics warn that it could drive hedge funds and p.e. firms out of the continent entirely.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note