U.K. Softens Blow Of Hedge-Fund Pay Rules

Sep 11 2013 | 2:18pm ET

Europe's new hedge-fund pay rules will not hit London firms as hard as feared under draft proposals from the U.K. Financial Conduct Authority.

The regulator plans to allow hedge funds with between £500 million and £1.5 billion to opt out of the restrictions, which strictly limit cash bonuses, requiring that at least half of compensation come in the form of fund units—and with long deferral periods.

Larger firms may also be able to escape the rules by showing that they have a simple organizational structure, operate in only one territory, employ non-exotic strategies or have straightforward governance.

The FCA will consult with the alternative investments industry—which the Financial Times says is pleased with the proposals—and won't publish final guidelines until the end of the year. That will mean new pay rules, if they actually affect anyone, won't come into force until the spring of 2016.

"The industry sentiment is that the FCA is taking a pragmatic and flexible approach in the consultation, and this is probably as good an outcome as the industry could have hoped for," Indos Financial's Bill Prew told the FT.


In Depth

Part II: Roubini Talks Risk, Recovery And The Threat Of A Triple Dip Recession

Oct 21 2014 | 12:41pm ET

In the second half of our interview with Nouriel Roubini, FINalternatives editor...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.