EU Finance Ministers To Back Hedge Fund Rules

May 13 2010 | 3:30am ET

Whether or not Britain or the United States likes them, the European Union’s proposed alternative investments regulations are likely to move a few steps closer to reality next week.

Having failed to convince the U.K. to accept the rules, Spain, which holds the rotating presidency of the EU, plans to push forward with a vote of financial ministers on the matter next week. Britain is almost certain to be outvoted at the meeting, which will come a day after a key European Parliament committee meets to vote on the proposals.

Both bodies must approve the controversial rules in order for them to become law.

Former British Prime Minister Gordon Brown blocked the directive’s adoption in March. The new prime minister, David Cameron, is not likely to be any more supportive. But the rules have sufficient support from other countries in the 27-member bloc to override British objections. The only other countries known to oppose the rules are Cyprus and Malta.

The EU’s finance ministers, including the new British Chancellor of the Exchequer, George Osborne, are due to meet in Brussels on Tuesday.

The proposed rules would impose strict new reporting and custody requirements on hedge funds and private equity funds, as well as potential leverage and borrowing limits. There are concerns—mostly from the U.S. and U.K.—that the proposals could block foreign funds from the European market.

EU Internal Markets Commissioner Michel Barnier promised yesterday to prevent that from happening. But he warned that U.S. and other foreign funds would have to live up to European standards in order to do business in the EU.

“I am not here to do a deal with the United States,” Barnier said after a meeting with U.S. Treasury Secretary Timothy Geithner, a vocal critic of the EU rules. “This agreement is between Europeans.”

Barnier said he would press the EU to institute a “passport” program that would grant foreign hedge funds that meet EU standards access to all EU countries. But he warned, “if we end up with a passport, it will be a passport that will have to be deserved.”


In Depth

Q&A: Executive Recruiter Talks Hedge Fund Closures, Hiring Trends

Dec 19 2014 | 6:58am ET

This year, hedge funds have been closing at a rate not seen since the financial...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Alternative Investment Funds Face A Communications Imperative

Dec 19 2014 | 6:10am ET

A handful of the top alternative investment firms on both sides of the Atlantic...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.