Europe’s Hedge Fund Oversight May Fall Only On Largest Firms

Apr 10 2009 | 12:23pm ET

The European Union’s draft proposal to tighten hedge fund oversight is likely to focus exclusively on the largest hedge fund and private equity managers.

Under proposed rules drafted by the European Commission, only “alternative investment fund managers” with at least €250 million (US$333 million) in assets under management would be covered by extensive new disclosure rules, Bloomberg News reports. The draft has not been finalized, but it is already attracting opposition for its failure to target funds as well as managers, as well as its exclusion of smaller firms, which would leave some 85% of hedge fund and private equity managers excluded from the new rules.

An explanatory memorandum explained the draft sought to focus on “where risks are concentrated,” arguing that smaller managers “are unlikely to give rise to important systemic risks or be a threat to orderly markets.”

Those firms that might pose systemic risks—which manage some 76% of all hedge fund assets in the 27-member EU—would be forced to provide a raft of new information to regulators. Under the draft, largest firms would have to report on risks, debts and trading activities, Bloomberg reports.

The EC is set to officially issue its proposals this month.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of