EU Unveils Proposed Hedge Fund Regulations

Apr 29 2009 | 11:56am ET

After many delays and amidst a chorus of criticism from all sides, the European Union proposed hedge fund and private equity regulations were unveiled today.

The draft law, put together by the European Commission at the request of the European Parliament, would force the continent’s largest hedge funds to report regularly to regulators. It would also impose minimum capital requirements.

Under the proposal, hedge fund managers with at least €500 million in assets under management—or just €100 million if they use leverage—would have to report on their main investments, performance and risk. The law would also place “exacting requirements” on minimum capital, risk management and accounting, Charlie McCreevy, the EU’s financial services commissioner, said.

The rules, if passed, would affect only EU-regulated hedge funds, for now. McCreevy expressed hope that “other jurisdictions around the world are going to look at what comes out of Europe and take some of the best ideas from there.” But he warned that if they have not done so within three years, funds based in countries with lower standards, or that refuse to cooperate in battling tax evasion, would be barred from being marketed in the EU.

The proposal requires the approval of a majority of the countries in the 27-member EU. But three of the bloc’s leading members—Britain, France and Germany—have already expressed skepticism about them. It also needs the assent of the European Parliament, whose second largest political group has already said the proposal does not go far enough.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note