Fink: EU funds rules may spark regulatory war-FT

LONDON, July 6 (Reuters) - The adoption of tough European Union restrictions on hedge funds could provoke a transatlantic regulatory war, one of the sector's leading figures told the Financial Times newspaper in an interview.

Stanley Fink, the former chief executive of Man Group (EMG.L), said that the European Commission's proposed regulation would be "very restrictive" for non-EU funds and some styles of investing.

"That could, and probably would, lead to retaliatory action whereby European hedge funds will be stopped from marketing in other jurisdictions (like the U.S.) and that could be very bad for the industry," he told the paper.

Asked if the restrictions could spark an international hedge fund war, he replied: "I think that could be one of the unintended consequences."

Fink, now chief executive of hedge fund International Standard Asset Management (ISAM) and co-treasurer of the UK's opposition Conservative Party, criticised the Labour government for its failure to defend the UK financial services industry.

"It is hard to imagine that legislation that harmed agriculture wouldn't have been killed at birth by the French, and legislation that damages the car industry wouldn't have been stopped by the Germans," he said.

Sweden, which holds the EU's presidency, has suggested it could dilute future rules.

But in draft form, it could make it difficult for hedge funds from the United States to market themselves in Europe, the FT said. (Reporting by Stefano Ambrogi; Editing by Leslie Gevirtz)