Possible EU Compromise On Foreign Hedge Funds

Jun 11 2010 | 12:25pm ET

The European Commission has injected itself into the sticky impasse between the European Parliament and European Union governments over how foreign hedge fund managers will be treated under proposed new regulations.

Under a compromise tabled by the commission, individual European governments could continue to decide which foreign hedge funds would be allowed to operate in their jurisdiction during a transition period. After perhaps three years, those state-by-state rules would be abolished in favor of a single system for the entire EU, Dow Jones Newswires reports.

If approved, the compromise would remove the final stumbling block to the EU rules, which would impose strict new reporting and custody requirements on hedge funds and private equity funds, as well as possible leverage and borrowing limits. Currently, the European Parliament is backing a so-called “passport” that would give foreign hedge funds that meet certain standards access to all EU markets. But European finance ministers, urged on by France, rejected such a move in their version of the regulations.

The approval of both bodies is necessary for the regulations to become law.

The fate of foreign hedge funds has dominated recent debate about the measure, with the U.K. and U.S. arguing vociferously against what they call “protectionist” measures, and France—which otherwise supports the tough Union-wide standards—arguing in favor of allowing national governments to decide which hedge funds are up to snuff.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.