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Bailey McCann, Opalesque New York:

The hedge fund industry is loudly attacking a new draft of "supplementing rules," to the Alternative Investment Fund Managers Directive (AIFMD) being circulated by the European Commission. The 110-page draft takes a much hard stance on alternative investments, and fails to include many recommendations from the European Securities and Markets Authority (ESMA).

Hedge fund industry association leaders and some countries including the UK are calling the new rules a naked power grab by the European Commission. An account in the Daily Telegraph quotes a source as saying that "much of the text it proposes is now extremely dogmatic and unworkable."

ESMA has been providing guidance to the European Commission on how to best implement the regulatory goals of the AIFMD - many of which are highly controversial with investment managers. Since the AIFMD was agreed to in 2011, the financial services industry through ESMA has been providing feedback on how the AIFMD would work in practice. On Friday, ESMA issued new technical standards and guidance on short selling, another contentious investment topic. However, the new rules draft, leaves out many key provisions opting instead......................

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