No Deal On EU Hedge Fund Rules

Oct 14 2010 | 1:28am ET

The European Union's proposed alternative investment regulations hang in the balance once again as talks to reach a compromise failed today.

European diplomats were unable to break the deadlock between the U.K. and France, which last week announced it opposition to granting foreign hedge funds access to all 27 EU countries, but later indicated a willingness to accept the so-called "passport" in exchange for other concessions.

Agreeing on those concessions now falls to Christine Lagarde and George Osborne, the French and British finance ministers. The two are expected to attempt to reach an accord in advance of next week's meeting of EU finance minister, where it is hoped a deal can be reached.

One of the non-starters in this week's negotiations were a plan that would allow EU countries to decline the passport agreement.

"Britain believes this would be an opt out," one diplomat told Reuters. "It allows member states to pick and choose."

The U.S. is pushing hard for a version of the passport that will be available to foreign hedge funds. In addition, the European Parliament, which must approve the alternative investments directive alongside EU governments, is also demanding it.

One diplomat underscored the urgency of reaching a deal next week.

"If there is no agreement now, it is going to last for another two years," a diplomat told Reuters.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...