France Blasts Proposed EU Hedge Fund Rules

Apr 28 2009 | 2:00am ET

France’s economy minister has become the latest to pile on the as-yet-unreleased but still remarkably unpopular draft hedge fund rules for the European Union. Just two days before the European Commission proposals are belated set to be published, Christine Lagarde warned that they won’t do enough to keep hedge fund in check.

“I do not think it responds to the requirements of transparency, control and appropriate supervision for hedge funds that become of systematic importance,” she said at a financial markets conference.

Lagarde’s voice is just part of a growing chorus denouncing the planned hedge fund rules. Both France and Germany—led by center-right governments—have expressed their disapproval, as have left-leaning legislators in the European Parliament. And the proposal is no more popular within the hedge fund and private equity communities, either, with the Alternative Investment Management Association recently coming out in opposition to it.

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.

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