AIMA claims “broad consensus” on EU hedge fund directive

Date: Thursday, October 8, 2009
Author: Laurence Fletcher, Reuters

For UK-based opponents of the controversial EU hedge fund directive, there are signs the draft could be overhauled.

Hedge fund industry body AIMA said today “there is now a broad consensus among European policymakers that the directive does need a lot of work and that there will be significant revisions”.

The group has been campaigning vigorously against the draft law, which proposes controls on leverage, which service providers can be used and where funds can be sold, and says it should instead focus on three areas — registration and authorisation, reporting of systemically-relevant data and a workable passport.

Given UK-based hedge fund managers are already regulated by the FSA and AIMA has already put forward proposals on reporting hedge fund positions to regulators, this would be a much-watered down version of the directive.

Meanwhile, Ken Clarke, shadow business secretary for the UK opposition Conservative party, told The Times he didn’t think hedge fund managers were genuinely concerned about the proposed new rules as they would be diluted through ordinary negotiations, although AIMA said “to declare an early victory is very premature”.

Nevertheless, there is a marked change of tone in the UK. The next step will be to see if that change is reflected when supporters of the Directive such as Poul Nyrup Rasmussen next lay out their position.