LONDON Feb 16 European Union president Spain
tightened proposed rules to regulate hedge funds and private
equity groups, prompting accusations of protectionism from
within the industry but potentially speeding up moves towards a
Spain recommended non-EU funds should only be marketed in a
member state if "appropriate cooperation agreements" are in
place between regulators of the countries involved.
The presidency's previous proposal had maintained the status
quo by saying EU states should be allowed to have third country
funds on their turf unhindered.
The amendment would modify a broader EU blueprint for the
industry, under which managers of alternative investment funds
would have to obtain authorisation and make regular disclosures
to supervisors in return for being able to offer their services
across the 27-nation bloc under strict conditions.
The blueprint dovetails with global efforts to shine a light
on all parts of the financial system by applying lessons from
the credit crunch.
EU states and the European Parliament have the final say on
the law authored by the bloc's executive European Commission.
Britain is likely to oppose Spain's amendment as it wants to
continue with existing national approval regimes, seen as a
preferable option to tough pan-EU marketing rules.
EU states will discuss the new compromise this week and
next. If backed by member states, it would put them in line with
Jean-Paul Gauzes, the French centre-right lawmaker who is
steering the bill through parliament.
Gauzes has proposed that third country funds can be marketed
in a member state if a manager's head office is in the EU or
information exchange cooperation agreements are in place between
the relevant regulators.
'MORE INTRUSIVE' APPROACH
Andrew Baker, chief executive of the Alternative Investment
Management Association, said Spain was proposing a more
intrusive approach and cooperation arrangements were open to
"You either have EU rules or you have national rules. The
idea of something in between is a bad one," Baker told Reuters.
"We are concerned that the original text of the directive,
which is protectionist in nature where it came to third
countries, could be drifting back," Baker said.
Baker said any curbs on investors in Europe would hit asset
managers in the United States, Canada, Switzerland, Hong Kong,
Singapore, Japan, Australia and South Africa.
Spain has also proposed that individual EU states be allowed
not to apply planned thresholds that bring fund managers under
"It's edging towards the idea that yet more funds can be
included. It's offering the lure that there is more to be gained
by not having a threshold or carve-out for smaller firms," Baker
(Additional reporting by Julien Toyer in Brussels, editing
by John Stonestreet)