U.K. Church Is Unlikely Defender of Hedge Funds

Date: Wednesday, October 7, 2009
Author: David Walker, The Wall Street Journal

The Church of England has emerged as an unlikely defender of the hedge-fund industry against the prospect of new regulations from the European Union.

Only last year, the Archbishop of York was calling hedge funds "bank robbers" for profiting from the fall in bank stocks.

Now, a group of six of the U.K.'s largest charitable foundations, including the Church of England, has told a House of Lords committee that a proposed EU directive would "significantly restrict our ability to generate funds to pursue our charitable missions and thus reduce our impact for public good."

The proposed rules would bar managers from outside the EU from marketing their services to EU-based investors. EU managers also would be barred from marketing within the bloc until they submitted to regulation involving disclosure of data to regulators and investors, leverage restrictions and using EU-authorized institutions as depositaries.

The Church's commissioners include John Sentamu, the archbishop of York. The other five bodies were the Wellcome Trust, the Nuffield Foundation, the Esmée Fairbairn Foundation, the Paul Hamlyn Foundation and the Henry Smith Charity.

The European Parliament will consider amendments to a draft directive next month.

Write to David Walker at david.walker@dowjones.com