Brit Wins Top Post In European Parliament, Offers Skepticism On Hedge Fund Law

Jul 23 2009 | 12:04pm ET

Britain’s battle to water-down the European Union’s proposed hedge fund regulatory scheme has another friend in high places.

The European Parliament has elected Sharon Bowles, a Brit, the new head of its economic and monetary affairs committee. And Bowles is none-too-happy with the controversial rules in their current form.

Bowles told Reuters that the bill needs to be changed, as it paints with too broad a brush in its current form.

“We will have to have a look at quite a lot of the articles and say, ‘does this really apply only to hedge funds and to private equity, and how can we deal with the range between?’”

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. Some industry players have warned it could lead to a trans-Atlantic regulatory war, as the EU proposal threatens to shut non-EU funds out of Europe.

Bowles’ own country has argued that the rules are too onerous and would drive hedge funds out of Europe, a particular problem for a country that is home to the overwhelming majority of the continent’s hedge fund industry. But other countries, including France and Germany, have demanded even tougher rules than those on offer. Bowles took a shot at those countries’ motive in pushing for stricter rules.

“There are those who love to hate both hedge funds and private equity and will want, if you like, to screw them down further because they think that plays well to the country and to the wider electorate,” she said.

But Bowles also warned that if EU members remain at loggerheads, it will delay any new regulation at all. She said that the planned first vote on the law in December is perhaps too optimistic, and that it will likely first face the European Parliament early next year.

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