Mon, Dec 22, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

EU Council adopts hedge fund rules

Monday, May 30, 2011
Opalesque Industry Update - The Council of the European Union adopted the Alternative Investment Fund Managers (AIFM) Directive on Friday 27th May, according to a press release issued that day. The adoption of the text follows an agreement already reached with the European Parliament.

Indeed, in November 2010, the European Parliament adopted by 513 votes to 92, with 3 abstentions, a legislative resolution of the proposal for a directive of the European Parliament and of the Council on the AIFM and amending Directives.

This concerns hedge, private equity, real estate, commodity funds “all other funds that are not covered by the directive on collective investment funds.”

The directive is aimed at establishing EU rules for monitoring and supervising the risks posed by alternative funds, whilst allowing fund managers to market their funds, subject to compliance with strict requirements. It was originally proposed by the European Commission in April 2009 as part of the EU’s response to the financial crisis.

The directive will enter into force on the 20th day following its publication in the Official Journal; member states will have two years to transpose its provisions into national law.

The main features of the directive are: authorisation for fund managers to operate; requirement to appoint an independent depositary; to apply risk management and prudential oversight; to provide a clear description of investment policies to investors; to limit leverage according to authorities’ requirements; to disclose information to shareholders when acquiring controlling stakes in companies; to use a passport to market funds throughout the EU.

Following a two-year transition period, the passport will be extended to the marketing of non-EU funds, managed either by EU AIFM or by AIFM based outside the EU. In accordance with the principle of "same rights, same obligations", this approach will ensure a level playing field, explains the European Council statement.

Furthermore, the directive gives member states the option not to apply the directive to smaller AIFM (funds managing less that Eur100m if they use leverage, and or less than Eur500m if they do not.)

The need for regulation and oversight of hedge funds is also being discussed within the G-20, the International Organisation of Securities Commissions and the Financial Stability Board.
B. Gravrand

See last year’s related article:
Opalesque Exclusive: AIFMD expected to start affecting hedge funds in 2015 Source

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Investing - Hedge funds get boost from healthcare in 2014, Paulson & Co takes stake in Salix on heels of inventory issues[more]

    Hedge funds get boost from healthcare in 2014 From Valuewalk.com: The healthcare sector started the year on a turbulent note, as stocks of many major biotechnology companies were battered. However, most of the players in this sector have bounced back. The BarclayHedge Healthcare & Biotec

  4. North America - Why Steve Cohen, Connecticut hedge fund billionaire, gives so much in New York[more]

    From Insidephilantrophy.com: Billionaire Steve Cohen was born in Great Neck, New York before attending Wharton, working on Wall Street and then founding SAC Capital Advisors in Connecticut. Though his company (Point72) and foundation are based in Connecticut, Cohen and Alexandra are deeply connected

  5. Investing - Soros buys a highly speculative biotech in the third quarter[more]

    From Fool.com: …The Soros Fund bought 25,000 shares of the struggling small-cap biopharma Aegerion Pharmaceuticals in the third quarter. For those of you who haven't heard of this name, suffice to say that this was a surprising buy in light of the company's recent problems and poor outlook going for