Top U.S. Lawmaker Proposes Retaliation For EU Hedge Fund Rules

Mar 24 2010 | 12:59pm ET

Turnabout is fair play, according to Sen. Charles Schumer (D-N.Y.)

The third-highest ranking Democrat in the U.S. Senate is threatening to block European alternative investment funds from marketing or raising money in the U.S. if the European Union adopts new regulations that have a similar effect on American funds in Europe.

In a letter to U.S. Treasury Sec. Timothy Geithner, Schumer blasted the proposed Alternative Investment Fund Managers directive as “protectionist rules that discriminate against U.S. firms and activities.” The EU rules would impose strict new reporting and custody requirements, as well as possible leverage limits. A draft of the legislation being hammered out by EU finance ministers would make it extremely difficult for foreign alternative investment funds to serve European clients; a version of the rules under consideration in the European Parliament would be somewhat less onerous.

Schumer’s own proposed legislation would mirror the EU, barring funds from outside the U.S. from marketing or raising money in the country, and mandating the use of U.S. banks for custody.

“Just as EU-based funds and custodian banks currently have full access to our market, U.S.-based funds and custodian banks should similarly not arbitrarily be denied access to the European market,” Schumer wrote.

EU officials have previously warned that they will not be bullied by Washington, and it is unclear what effect, if any, Schumer’s threat would have. The vast majority of European hedge funds and private equity firms are based in the U.K., which already opposes the proposed rules.


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Compelling Opportunities In The Alternatives Space

Jul 29 2014 | 9:33am ET

In an environment where many asset classes seem expensive by historical standards...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note