British Promise To Fight EU Hedge Fund Rules

Jun 15 2009 | 1:33am ET

The British government has vowed to fight “tooth and nail” to save London’s hedge fund industry from the European Union’s plan to impose strict new rules.

Paul Myners, the U.K. financial services secretary, promised to fight to lessen the impact of the proposed rules at this week’s European Council meeting. Myners also said he would meet with Sweden’s deputy finance minister next week; Sweden assumes the rotating presidency of the EU next month.

“We think there is a job of work to be done here and we will fight tooth and nail to make the necessary improvements,” Myners said.

“What we could not live with is an agreement at the European level that would have had domestic fiscal consequences for domestic governments.”

The proposed EU rules would impose new disclosure requirements on European hedge funds, as well as empower both national and European authorities to impose leverage limits.

Myners’ words are likely to be music to the ears of London’s hedge funds, many of which have threatened to quit the British capital if the EU rules come into force. London is Europe’s largest hedge fund center, and the second-largest in the world after New York. But he warned the industry that threats and fingerpointing harm their case.

“It is wholly unhelpful of hedge funds—which have made lots of money in London—to say at the first sign of regulation from Europe that they intend to up-sticks and go,” he said.

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