Wed, Apr 1, 2015
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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Opalesque Roundtable: Emerging managers should avoid chasing 'institutional unicorns'[more]

    Bailey McCann, Opalesque New York: For managers looking to raise a new fund after the crisis, marketing efforts will need to be significantly different, according to delegates at the recent Opalesque Texas Roundtable. "Most of the smaller managers come to the whole fund-raising and marketing

  3. Cohen's private investments deliver strong 7.5% gain in Q1[more]

    From Reuters.com: Billionaire Steven A. Cohen's investments gained 7.5 percent in the first three months of 2015, according to a person familiar with the numbers, helping the former hedge fund manager extend his string of market-beating returns. Cohen's Point72 Asset Management, which invests

  4. Hedge fund launches fall again, $1bn funds found to outperform even smaller hedge funds[more]

    Komfie Manalo, Opalesque Asia: The number of new hedge fund launches fell again in 2014, the third consecutive year of decline, while fund liquidations saw their first drop since 2010, according to the latest HFR Market Microstructure Industry Report released by industry data provider HFR. Acc

  5. Opalesque Exclusive: Cyber security and hedge funds: increased awareness, Part One[more]

    Benedicte Gravrand, Opalesque Geneva: If you look at the recent cybersecurity news from Bloomberg, hackers are frightening the people: they steal photos and threaten to expose them, they can break into ATMs, they ha

 

banner