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European investment directive delayed after Brown intervention

EU legislation to curb the powers of hedge funds has been delayed following a plea from Prime Minister Gordon Brown.

According to press reports, Brown called for the controversial Alternative Investment Fund Managers directive to be excluded from the agenda at yesterday’s gathering of finance ministers from the 27 EU states. It was likely that Britain would face a defeat regarding the directive with France leading a number of countries looking to bring in tougher regulations of hedge fund and private equity.

As a result, it has now been put on hold until after the  general election.

However, reports suggest that Spain, holder of the rotating European Union presidency, intends to secure a deal on proposed legislation on the alternative investments sector before its term ends in June.

In recent months, the FSA has expressed concern about aspects of the AIFM directive, with FSA director Dan Waters warning that parts of the directive could be viewed as a protectionist attempt to protect EU funds from competition from outside Europe.

Last year, the IMA and NAPF expressed concerns to Money Marketing that the directive could lead to heavy restrictions in investing in emerging markets funds.

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  1. Should it come as a surprise to anyone that Mr Brown is against this regulation of hedge funds. Mr Brown, despite his protests over their impact on the banking crisis, has benefitted from applying a hedging policy to investments held in the Pension Protection Fund. Had it not been for this hedging policy, The defict within the fund would have increased by 12% without the hedging policy.
    So Mr Brown, and easy question – Are you for or against hedging? Please do us all a favour and stop playing with the truth by spinning the answer to suit your particualr requirement at the time.

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