Mon, Feb 27, 2017
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. Opalesque Exclusive: Swiss investors take fund seeding and acceleration into their own hands[more]

    Benedicte Gravrand, Opalesque Geneva: Banque Bonhote, a 200-year old Swiss private bank, last year launched a community of investors - heads of Swiss family and advisory offices and wealth managers - with the aim of co-investing in the kind of managers they wanted to invest in, either by way of s

  2. K2 Advisors : Why We Like Activist Hedge Fund Strategies and Some Thoughts on Alpha[more]

    Matthias Knab, Opalesque: Rob Christian, Senior Managing Director, Head of Research K2 Advisors, Franklin Templeton Solutions, writes on Harvest Exchange: When d

  3. Ex-Navy SEAL backed by Mario Gabelli, Jean-Marie Eveillard and other value giants off to strong start[more]

    From Valuewalk.com: Sententia Capital Management is not your average value focused hedge fund. The fund was founded by Michael Zapata, a former Navy Seal Team 6 Officer and has attracted funding from some of the best-known names in the value space. Mario Gabelli, Jean-Marie Eveillard from First Eagl

  4. Europe - 1 trillion euro non-performing loans are clogging EU lending channels[more]

    From Centralbanking.com: As much as 1 trillion euro of non-performing loans (NPLs) are still clogging the lending channel in the European Union. An EU asset management company (AMC) could address market failures in the secondary market for NPLs as part of a suite of measures designed to tackle the b

  5. Investing - Hedge funds' novel approach: investing for longer at lower returns, U.S. hedge fund Delta Partners lifts stake in Bellamy's, Hedge funds stockpile cobalt, electric carmakers on battery alert, Facebook is racking up the likes among the world's biggest hedge funds, Einhorn affirms gold on Trump uncertainty[more]

    Hedge funds' novel approach: investing for longer at lower returns From FNLondon.com: Hedge funds are known for making short-term bets, dipping quickly in and out of markets to take advantage of swings in prices. But, under pressure to innovate, some big-name managers are looking at ways