Wednesday, 27 July 2016
Last updated 1 hour ago
Apr 14 2010 | 11:51am ET
The European Union’s internal markets chief is asking his political patron to compromise in a bid to push through controversial hedge fund regulations.
Michel Barnier has approached a top adviser to French President Nicolas Sarkozy, asking Sarkozy to drop his opposition to the so-called passport that would give foreign hedge funds access to all 27 EU member states. The French are dead-set against the rule, believing that foreign hedge funds should have to get the OK of each state before they are allowed to do business there.
But the British are dead-set against what they see as the protectionist aspects of the controversial rules, which would also impose strict new reporting and custody requirements on European hedge and private equity funds. Last month, British Prime Minister Gordon Brown blocked the approval of the rules by the EU’s finance ministers, and the opposition Conservative Party, tipped to win next month’s British elections, have pledged to continue Brown’s line.
Barnier has spoken with Xavier Musca, one of Sarkozy’s top economic advisers, according to Reuters. Sarkozy was instrumental in winning Barnier’s appointment to the EU’s top financial post.
Meanwhile, the legislator charged with maneuvering the hedge fund rules through the European Parliament also indicated a willingness to consider the passport, arguing that it could be a necessary concession to the bill’s opponents.
Jean-Paul Gauzes said that foreign funds that comply with the stricter European rules should be allowed to market their wares on the continent. He is currently negotiating with the European Parliament’s largest parties on the big in advance of an April 27 vote.
“There has to be an agreement between European supervisors and third-country supervisors,” Gauzes said.