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FINANCIAL REGULATION : BARNIER DISMISSES "REARGUARD LOBBYING" ON HEDGE FUNDS.

The European Commission has hit back at what it calls "rearguard lobbying" on the Directive on alternative investment fund managers (AIFM), approved in 2010 and to come into force in July 2013. The EU institutions are currently in informal talks on complex implementing measures' - to be tabled in a regulation this month - to make the new rules operational. Industry says the draft goes beyond what was agreed in 2010.

Negotiations on the AIFM were long and arduous and saw governments and MEPs split over how to ensure non-EU managers were appropriately regulated before they were given access to EU markets. Industry says the implementing regulation suggests that foreign regulators sign legally binding cooperation agreements with their EU counterparts to show that their hedge fund managers are subject to sufficiently stringent rules. The Alternative Investment Management Association (AIMA) said, on 2 April, that these accords would be "extremely problematic if not impossible to conclude" if foreign regulators were effectively being asked to apply EU law in their own jurisdictions. AIMA says the Commission is departing from advice given by the European Securities and Markets Authority (ESMA) last November on the issue, which said the agreements should be based on rules laid down by international standard-setters, but the Commission says the ESMA advice is not binding.

"Despite the pressure from those trying to reopen old issues, we won't abandon our efforts to ensure that all financial actors, be they banks or hedge funds or other financial institutions, are appropriately regulated and effectively supervised," Commissioner Michel Barnier said. MEPs and governments have until 17 April to respond to the draft regulation before it is officially tabled. The Commission wants it adopted by July.

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Publication:European Report
Date:Apr 4, 2012
Words:280
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