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Trio of regulators slam EC’s hedge fund regulation plans


Date: Thursday, June 25, 2009
Author: Rob Davis, City A.M.

THE EUROPEAN Commission’s (EC) proposals for regulation of the alternative investment industry are flawed, three of the world’s top regulatory reformers said yesterday.

Jacques de Larosière, author of the report behind the EC’s plans for a pan-European regulatory system joined Financial Services Authority chairman Lord Turner and Conservative adviser Sir James Sassoon in criticising the EC’s draft directive on the regulation of hedge funds and private equity.

Speaking at a conference hosted by think-tank Business for New Europe, Delarosiere said he had “some doubts on the wisdom of some aspects of the directive,” such as leverage requirements, adding that “private equity should be kept out of heavy regulation”.

Lord Turner said he was concerned that the alternative investment sector had become a “target”.

And Conservative adviser Sir James Sassoon said: “It’s hard to find a kind word to say about a directive so disproportionate in scope, so protectionist in its effect and so poorly drafted.”

Business minister Lord Myners said he had received assurances from Sweden, which takes over the EU presidency on 1 July, that it would work with the UK to explain the merits of the alternative investment industry to European counterparts such as France.