EU executive proposes hedge fund registration law

BRUSSELS, April 29 (Reuters) - The European Commission proposed a draft law on Wednesday that would make it mandatory for hedge funds to register and disclose information on leverage to supervisors if they want to operate in the European Union, a Commission official said.

The draft law has been subject to intense horse-trading ahead of its publication as Britain, the EU's hedge fund centre, fears overly draconian rules, while France is a keen backer on tighter regulation.

The global hedge fund sector has assets totalling $1.4 trillion, relatively small compared to the wider financial market. But policymakers say the lightly regulated sector can pose risks to the overall financial sector that need to be better identified and monitored.

The draft law will also require firms such as private equity groups buying a controlling interest in a larger company to disclose information about the company's performance.

EU states and the European Parliament have the final word and amendments to the draft law are likely with adoption typically taking about 18 months.

(Reporting by Huw Jones, editing by Mark John)