BRUSSELS (MNI) – The EU’s executive arm is still hopeful for a
compromise on controversial plans to regulate hedge funds and other
investment vehicles within the 27-country bloc, European Commissioner
for Internal Markets Michel Barnier said on Wednesday.
Talks on the Alternative Investment Fund Management Directive —
which would impose tighter controls on the activities of hedge funds,
private equity and other investment vehicles — stalled earlier this
week after members of the European Parliament failed to agree on the
wording of the legislation.
Central to the debate is the concept of a European “passport” for
alternative investment funds, which would allow such funds based outside
the EU to sell to investors within the EU, if they complied with certain
criteria. Some countries, such as France, want stricter controls
attached to any such passport. Others, like the UK, are more concerned
with the timing of phasing them in.
“I note that there has been useful progress made,” Barnier said,
adding that he was sure the Belgian Presidency of the EU would be able
to broker a fresh deal.
“I remain convinced that a passport is a very useful tool for this
sector,” he said. “It will be a rigorous passport.”
France and the UK remain divided over the passport issue, but
officials hope that France will ease its opposition to the passport deal
and come to a “dynamic compromise.”
But that’s not the only issue with this legislation. The European
Council, which represents the EU’s 27 governments, opposes the
Parliament on some of the new private equity rules.
Members of the European Parliament want to see tighter controls on
what private equity firms can do after they buy companies, with a
specific focus on asset stripping. The EU Council opposes this.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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