Just when it looked like hedge funds would dodge the worst of the European Union’s proposed alternative investments rules, Brussels has whipped up another bitter pill.

The European Council and European Parliament, which are reviewing the proposed legislation, have decided to impose their proposed rules for banking compensation on hedge funds and private equity firms.

Under the banking pay rules, which are also currently being debated, 40% of bonuses would have to be deferred for at least three years, and a “substantial” amount would have to come in the form of shares. Mats Odell, the financial markets minister of current EU president Sweden, said the alternative investments pay rules “will be very close” to the banking rules.

That news did not sit well with the hedge fund industry. Antonio Borges of the Hedge Fund Standards Board, the industry self-regulatory organization, called the pay proposals “inappropriate because the compensation scheme in banks raises a whole series of issues that do not apply to hedge funds.”

Florence Lombard, executive director of industry lobby the Alternative Investment Management Association, said applying the banking rules to hedge funds doesn’t make sense, because unlike banks, “there is no single hedge fund in the world that has either been bailed out or received a handout.”