Tuesday, 23 August 2016
Last updated 3 hours ago
Sep 29 2010 | 10:12am ET
French President Nicolas Sarkozy appears poised to demolish the growing consensus around proposed European Union hedge fund regulations in a bid to put an end to the so-called “passport.”
EU governments and the European Parliament has been negotiating for months a compromise alternative investments directive that would impose strict new rules on hedge funds and private equity funds while opening all EU markets to those firms—including foreign hedge funds—that meet the stringent new requirements. The French oppose such a passport, insisting that access be left to individual governments.
Now, the French have reportedly prepared their own, stricter version of the hedge fund directive to present what Syed Kamall, a British member of the European Parliament, told The Telegraph would be a “fait accompli.” The French have refused to share the text of their version with the British, but have reportedly won enough support to block the compromise version.
It is unclear, however,t hat France would be able to garner enough support to actually pass its version of the rules, which would leave the controversial proposed regulations in limbo.
“This would be a profoundly protectionist move,” Alternative Investment Management Association CEO Andrew Baker told the Telegraph of dropping the passport. “The French proposal could be calamitous for European investors, who could be prevented from investing in funds or managers outside the EU and non-EU hedge fund managers who would find it very difficult to access the European market.”