BRUSSELS (MNI) – New hedge fund legislation approved by European
Union finance ministers on Tuesday are not entirely consistent with the
European Union’s single market rules, UK Chancellor of the Exchequer
George Osborne told reporters on Tuesday.
The UK was overruled by other finance ministries on Tuesday, who
want to bring in tough new rules to clamp down on alternative
investments, including hedge funds and private equity firms. These are
set out in the Alternative Investment Fund Managers Directive, or the
AIFM directive.
“The AIFM directive… is not entirely consistent with the single
market,” Osborne said.
“I think we should be consistent with single market principles,” he
said.
The main UK concerns are over hedge funds which have London-based
managers and assets based outside the EU. Under the proposed rules,
those countries would have to obtain a “passport” before they could
market their products in the 27-nation bloc.
Osborne said he had been left in a difficult negotiating position
by the previous Labour government but he was “very pleased” that the
final document now reflected the UK’s concerns. “There were close to no
allies around the table,” he said.
“I am in favour of a properly regulated hedge fund industry and the
G20 made that clear,” he said.
Osborne said “the UK will introduce a bank levy… I like the
principles set out by the IMF, which were around the tax of the balance
sheet or a profit or both,” he said.
He said he was in favour of proposals which ensured the financial
sector pays its fair share, but questioned the practicality of a
financial transaction tax.
“Of course we will support British interests but we are also
interested in ensuring that the entire European economy grows,” Osborne
said.
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
[TOPICS: MT$$$$,M$$FX$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]
