European alternatives debate heats up
The European Parliament's latest meeting on the future regulation of the alternative investment industry included an open and frank two-hour discussion on the scope of Europe's planned oversight of the sector, with a Conservative MEP particularly vociferous in his support of hedge funds.
The European Parliament's economic and monetary affairs committee, chaired by UK Liberal Democrat MEP Sharon Bowles, met yesterday to discuss the alternative investment fund management directive for the second time.
The meeting lasted for over two hours, according to a source familiar with the meeting, with a open and frank debate taking place on the scope of the directive, its proposed limits on leverage and third country provisions.
The first meeting, held early last month, was described as a "first exchange of views" on the Alternative Investment Fund Manager (AIFM) directive, with only one hour allotted to the discussion.
Syed Kamall, a UK representative for the European Conservative and Reformists party and a shadow rapporteur on the directive, continued his pro-hedge fund stance, according to the source.
At the first meeting early last month, Kamall urged committee members to look at how their constituents would be affected by the loss in tax revenue and the reduced number of investment options for pension funds if limitations proposed in the current form of the directive were to be put into action.
The European Council was represented at the meeting by Lotta Erikson, while the European Commission was represented by Ugo Bassi, who defended the directive against some of the criticisms of its scope.
Directive rapporteur Jean Paul Gauzés closed the meeting by thanking the shadow rapparteurs – Kamall, along with Wolf Klinz of the Alliance of Liberals and Democrats for Europe from Germany and Pascal Canfin of France’s Green party – for a rich debate and reiterated that he was committed to finding a pragmatic solution.
The meeting came on the same day that Financial Services Authority chairman Lord Adair Turner addressed his concerns about the directive in a speech at the City of London Corporation’s annual reception for the City Office in Brussels.
The thrust of the directive makes sense, he said, but the FSA was concerned that some of the provisions were too stringent.
He said: "We have sought to explain our concerns that some of the provisions create the danger of overly prescriptive regulation. For instance, via a too simplistic approach to assessment of sustainable leverage, too little differentiation between types of alternative investment fund, and impractical restrictions on those who provide services to hedge fund managers and other alternative fund managers – including those supporting service providers based outside the EEA."
– write to mturner@efinancialnews.com
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