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Benedicte Gravrand, Opalesque Geneva: - Le Figaro, a French daily, reported in January that Parliament was looking into two different aspects of a proposed rule to segregate speculative activity from banking activity. The first one would consist in monitoring the relationship between banks and hedge funds ("fonds alternatifs"). The second one would further restrain high frequency trading (HFT).

Les Echos, another French newspaper, reported last week that this project had been reviewed by the French National Assembly and was now being looked into by the French Senate. The Assembly reinforced the possibility to restrict speculative activity within banks as well as clients’ rights. Senators have more limited room to manoeuvre, the paper notes, but they are still expected to toughen up some proposals, especially when it comes to tax havens. Investment companies may indeed be required in future to do a lot more reporting of the gross profits from in each of the country they invest in – as per the European Union’s Directive CRD4, to come into effect next year.

Another priority for senators, Les Echos continues, is bank lending to hedge funds. At this stage of the law proposal, banks can retain this activity within their head-quarters if their exposure is secured with collaterals. The Socialist senators app......................

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