Saturday, 1 October 2016
Last updated 12 hours ago
Mar 23 2010 | 3:30am ET
If proponents of the European Union’s proposed hedge fund regulations hope a change in government in London will smooth the path, they are likely to be disappointed.
The U.K.’s opposition Conservative Party, widely expected to become the largest party in the British Parliament after the country’s elections, expected in May, would oppose the legislation, one of its EU leaders said. Prime Minister Gordon Brown of the Labour Party last week stopped the Alternative Investment Fund Managers directive in its tracks, blocking the approval by the bloc’s finance ministers which is required for it to become law.
With opposition from both the left and right in London, Europe is set for a pitched battle on the directive no matter who wins the British election.
“What’s on the table—to make it difficult for European investors to invest in non-EU hedge funds—is protectionism,” Syed Kamall, a Conservative member of the European Parliament, told Reuters. A Tory government “would make it clear that it isn’t acceptable.”
The EU rules would impose strict reporting and custody requirements on European hedge funds and private equity firms, as well as possible leverage limits. Among the 27 EU members, only Britain, Cyprus and Malta are reportedly opposing the legislation.
But Kamall warned the rest of the bloc against bullying the U.K., home to the overwhelming majority of the European alternative investment industry.
“It would not look good if the other EU countries were to gang up against Britain,” he said.