Hedge Fund Regs Kicked into the Long Grass
Lots of sabre-rattling followed by not much action, we’re in Europe you say…?
The UK got a last minute (indirect) helping hand from America over the new Hedge fund regulations.
Long jealous of City dominance, France, Germany, Italy and Luxembourg would like to see the AIFM (Alternative Investment Fund Management) directive go ahead. But the current form of the proposals has brought the wrath of the Americans who don’t like the protectionist angle – one clause would mean European investors could only invest with managers domiciled in Europe.
Business Week: Transatlantic tensions grew last week when EU financial- services commissioner Michel Barnier vowed to defend the proposals after they were criticized by U.S. Treasury Secretary Timothy F. Geithner. Geithner said in a letter to Barnier the new rules may discriminate against U.S. funds. The plan would force funds based outside the EU to accept the rules if they attract investors from the 27-nation bloc.
Rather than risk starting a trade war with the U.S. the Eurocrats decided to retreat to their bunkers and consider some compromises. And the outnumbered UK breathed a sigh of relief.
Hedgies themselves are more concerned about disclosure requirements regarding trading strategy, risk management systems and valuation of assets but any delay will be welcome.
