Bringing you live news and features since 2006 

Comment: Alternative fund proposals set to prompt new EU bickering

RELATED TOPICS​

Hedge fund managers are set to face a new layer of regulation at European Union level, amid a global regulatory clampdown on the financial industry in response to the financial crisis of t

Hedge fund managers are set to face a new layer of regulation at European Union level, amid a global regulatory clampdown on the financial industry in response to the financial crisis of the past 18 months.

Under the proposed rules unveiled yesterday by the European Commission, hedge fund and private equity firms that manage at least EUR100m in assets (or EUR500m if they don’t use leverage and impose a five-year investor lock-up) will have to report regularly on strategic investments, performance and risk, and meet ‘exacting requirements’ on minimum capital, risk management and auditing, according to internal market commissioner Charlie McCreevy.

Unsurprisingly, the rules have provoked criticism from the industry as well as from some EU member states, although not necessarily for the same reasons. The Alternative Investment Management Association described the drat directive as a ‘punitive’ response to a crisis not caused by hedge funds, noting that most of the European hedge fund industry in Europe is already overseen by the UK’s Financial Services Authority.

The initiative is not yet law as yet. It will require need approval from a weighted majority of the 27 EU countries as well as from the European Parliament, and neither can be taken for granted. There is scepticism from the UK, which might be joined by the EU’s leading fund jurisdictions, Luxembourg and Ireland.

By contrast, France and Germany have already called for tougher measures. French finance minister Christine Lagarde (pictured) has criticised the draft directive for not going far enough to tighten oversight of the alternatives industry, and the leader of the Socialist bloc in the European Parliament says the rules proposed are meaningless.

But one way or another it looks likely that the EU will eventually impose its rules on hedge fund and other alternative managers. Whether it will do anything for the continent’s financial stability or prosperity is another matter.

Latest News

EFAMA has published its latest Monthly Statistical Release for May 2024...
Solactive writes that it has expanded its collaboration with Kiwoom Asset Management by providing the underlying indices to the KIWOOM..
MSCI has announced the launch of MSCI Private Capital Indexes, writing that with growing investor interest in private markets, high..
Matteo Greco, Research Analyst at Fineqia International, writes that bitcoin (BTC) ended the week at approximately USD68,150, marking a 12.1..

Related Articles

Scott Kefer, VictoryEx Capital Holdings
Bailey McCann writes that active ETFs are capturing investor interest, according to the latest data from Morningstar, which finds that...
Chris Lo, Columbia Threadneedle
In a recent insight on India by Columbia Threadneedle Investments, the firm reports that the country’s economic reforms, which aim...
With an election on the horizon in the United States a group of ETFs is poised to capture investments on...
Robot worker
Qraft Technologies, based in South Korea, specialises in the use of AI in security selection and portfolio construction....
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by