Final Deal Struck On EU Alternative Investments Rules

Oct 26 2010 | 1:25pm ET

After months of bickering and battling, a final agreement has been reached on the European Union's controversial proposed alternative investment regulations.

A week after France and the U.K. struck a deal of their own on the directive, paving the way for its approval by the EU's 27 member states, those states and the European Parliament have reached a deal that assures its passage by the latter. Approval by both bodies is required for the proposal to become law, which it is now expected to do early next year.

The European Commission's agreement with the parliament contains a few changes from the draft approved by EU governments. But those are relatively minor; the real heavy-lifting on the compromise was accomplished last week by EU finance ministers after an increasingly isolated France agreed to drop its opposition to granting access to all EU markets to foreign hedge funds.

The directive will impose strict new reporting and custody requirements on hedge funds and private equity funds, as well as placing them under the authority of the new European Securities and Markets Authority. Private equity funds will also face new asset-stripping rules.

The controversial passport will not come into effect for EU firms until 2013, and foreign funds will not be eligible until 2015. Until then, the current regime that allows each EU country to decide which funds will have access to their markets remains in place.

The European Parliament is set to vote on the directive on Nov. 11.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...