FSA Proposal Would Allow U.K. Hedge Funds To Opt Out Of Bonus Rules

Nov 16 2010 | 2:16pm ET

British hedge fund managers may skirt tough new European bonus restrictions, after all, with the Financial Services Authority mulling an opt-out.

Under the new proposal, hedge funds would be given the opportunity to explain why they cannot comply with the EU-imposed bonus limits, which would require at least half of any variable compensation to be paid in shares or some equivalent non-cash instruments. The proposal could even give large, listed firms, including the Man Group, the opportunity to escape the restrictions as a competitive disadvantage, Bloomberg News reports.

Creating a "comply or explain"  exemption was backed last month by the Committee of European Banking Supervisors.

The FSA may also extend the deadline for compliance from January to June.

The regulator earlier this year sent a shiver down hedge fund spines when it announced that it would extend bonus rules that already apply to its 27 largest lenders to more than 2,500 firms, including asset and hedge fund managers. The regulator has said, however, that it would seek to apply those rules "proportionally."


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...