Vote on EU move to regulate hedge funds delayed again

Date: Thursday, September 9, 2010
Author: Gilbert Reilhac, Reuters

The European Union will again delay voting on regulation aimed at giving foreign hedge funds a single license to operate in Europe due to disagreement over the move, a senior lawmaker said on Wednesday.

Jean-Paul Gauzes, the French parliamentarian leading negotiations with EU member states on efforts to tighten regulation of hedge funds and private equity firms, said he now hoped to reach agreement on a text before a session of the European Parliament in early October.

"The vote initially scheduled for the week of Sept 20 will finally take place in October," Gauzes told reporters.

"It could be in Brussels on Oct 6 and 7, or in Strasbourg at the end of the month."

Belgium, which holds the rotating six-month presidency of the EU, has put forward new proposals to unblock the negotiations, which started more than a year ago. It proposes maintaining the possibility of a "European passport" for foreign hedge funds but leaving it up to national financial supervisors to grant the license to operate.

In exchange, Belgium wants to adopt a common set of rules across the continent and give a greater role to three new European financial supervisors -- agreed by EU finance ministers this week -- if the rules are not implemented properly.

Representatives of the European Parliament, the European Commission and EU member states have repeatedly failed to reach a deal over the new hedge fund rules. They will meet again on Sept 15 to see if they can agree on a text for the parliament.

According to European diplomats, France is still opposed to any rule allowing foreign funds to have a "European passport."