The Alternative Investment Fund Managers Directive could see costs for small fund managers increase, according to Deloitte.
The firm says strict implementation of the European directive would raise costs for smaller managers.
Deloitte Investment Partner Stuart McLaren says a recent paper by HM Treasury has set out two legislative options stricter than required.
He says: “The question alternative investment fund managers will want answered is: How proportional will the FSA’s approach be?
“Will they recognise that not all alternative managers are the same, specifically that they pose fundamentally different risks to investors and the wider market?”
McLaren adds: “The costs fund managers face will depend largely on how the FSA applies the rules. Regardless, the cost of doing business for small managers will rise.”