Hedge Fund Lobby Warns Over 'Third Country' Rules

Feb 10 2012 | 2:44am ET

The hedge fund industry is crying foul—again—over proposed European Union regulations that would impact funds' relationships with entities outside of the bloc.

The Alternative Investment Management Association is taking issue with the Markets in Financial Instruments Directive. A proposed revision of those rules, which cover services used by hedge funds, needs major changes, including a new definition of algorithmic trading that could be read to include all computer-assisted trading.

"The most worrying proposals are around third countries, particularly the need to register with [the European Securities and Markets Authority] if you wish to trade with European eligible counterparties," AIMA's Jiri Krol told HFMWeek. "It's another element in a long line of quite unfortunate third-country regulatory proposals. This could make life difficult for all market participants, not just investment managers."

AIMA's latest worry follows its fight over the third-country provisions in the EU's Alternative Investment Fund Manager Directive, which comes into force next year. Despite a deal struck in 2010 that would give third-country hedge and private equity funds access to EU markets on equal footing with EU funds, AIMA warned in September that ESMA's plan for implementing the new rules could actually bar EU investors from investing in non-EU funds.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of