Hedge Funds Get New EU Rules
Tough new EU-wide rules on the marketing of alternative investment funds have been adopted by the European Parliament.
In its drive to increase economic stability in the wake of financial turbulence over the last several years, the EU has pushed through chapters on asset stripping and remuneration principles. There are also changes on the passport system, depositary liability, capital requirements and the use of leverage.
Under the leadership of Jean-Paul Gauzès (EPP, FR) the new legislation introduces pay rules and restrictions on asset stripping. There is also strict liability of depositaries, who are key players in the running of these funds, to ensure that damages can always be claimed by the investors.
Depositary liability was increased to prevent further Madoff-style scandals, said the EP.
The new directive also enables non-EU AIF and AIF managers to market to investors across the EU without first having to seek permission from each Member State and comply with different national laws.
The directive's rules are to take effect by 2013, and four years after this the Commission will undertake a general review of the rules.
The new directive was approved by 513 votes to 92 with 3 abstentions.