Regulation

Spain, which holds the rotating presidency of the European Union, postponed a vote of the Union’s finance ministers on the directive, which would impose strict new reporting and custody requirements on hedge funds and private equity firms, and could freeze out foreign hedge funds. 

The head of the U.S. Senate’s Banking Committee will unveil a new comprehensive financial regulation reform bill today, one that does not include the controversial Volcker Rule.

Despite the findings of German regulators that there is no evidence that hedge funds used credit default swaps to push his country to the brink of default, Greek Prime Minister George Papandreou is demanding that hedge funds be more strictly regulated.

European Commission President Jose Manuel Barroso told the European Parliament that that new “reflection” is needed on sovereign CDS.

The German financial regulator, BaFin, said that it had found no evidence that credit default swaps were being used to push Greece towards default.

The British government is set to begin a last-ditch effort to water down the controversial hedge fund and private equity rules being considered by the European Union, even as hopes dim in London about its chances for success.

The European Commission is held a pair of meetings today to determine whether new rules are required to govern the credit-default swaps market, and were particularly interested in what hedge funds were doing with CDS.

If hedge fund and private equity executives thought they’d caught a break with the departure of Rep. Charles Rangel (D-N.Y.) from the helm of the House of Representatives’ tax-writing committee, think again.

In a five-page legislative draft sent to Congress, the Treasury Dept. suggested a two-year phase in for the rule, which would bar banks from the alternative investments industry.

Michel Barnier showed an unwillingness to compromise on the EU’s proposed hedge fund and private equity regulations, which would impose strict new reporting and custody requirements on alternative investment firms.