European Parliament Will Move Forward On Hedge Fund Law

Mar 18 2010 | 8:47am ET

The European Parliament will not be deterred by the British-backed delay in approving European Union hedge fund legislation, a top lawmaker said.

Jean-Paul Gauzes, the French member of the parliament sponsoring the Alternative Investment Fund Managers Directive, said parliament’s timetable for approving the bill wouldn’t be affected by the Spanish government’s decision to delay seeking the approval of the EU’s finance ministers for the proposal. Spain currently holds the rotating presidency of the 27-nation bloc.

“We certainly shouldn’t wait,” Gauzes said of the parliament. The directive requires the approval of both that body and EU member states before becoming law.

Gauzes told Bloomberg News that he recognized that the British, home to the overwhelming majority of Europe’s alternative investments industry, “might not want a decision like this to be taken” before its upcoming election, expected to happen in June. He also acknowledged “a political problem” with the directive’s provisions dealing with non-EU funds.

The proposed law could block such funds from Europe, a possibility that has drawn the ire of U.S. Treasury Secretary Timothy Geithner. The bill would also impose strict reporting and custody requirements on hedge funds and private equity funds, as well as possible leverage limits.

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