Would-Be British Pointman On Hedge Fund Regs. Seeks ‘Sensible Discussion’

May 6 2010 | 12:22pm ET

Should the British Conservative Party win today’s election—and manage to form a government—the country’s next Chancellor of the Exchequer will have a major issue on his plate on day one.

As Britons go to the polls, representatives of European Union countries are meeting today to hammer out their differences over the bloc’s proposed alternative investments regulations. In March, British Prime Minister Gordon Brown, who may well be out of a job tomorrow, refused to allow the EU’s finance ministers to approve the rules, which is necessary for them to become law. But they must come to a vote by May 18.

George Osborne, likely to become Chancellor under Prime Minister David Cameron, has previously pledged to maintain the governing Labour Party’s line on the hedge fund directive. But the U.K. is isolated in its opposition to the rules, and it is unclear that either Osborne’s Tories or Prime Minister Gordon Brown’s Labour could stop them.

“I’m not against a properly regulated hedge fund industry, but my concern is that the directive is poorly targeted and singles out the U.K.,” by far Europe’s largest hedge fund and private equity center, Osborne told the Financial Times.

Still, he may have little more than week or two to hammer out a compromise more favorable to the British alternatives industry.

“I’m not looking for a fight,” he said. “I’m looking for a sensible discussion.”

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