Hedgie anger over EU rules

HEDGE fund and private equity managers are growing increasingly angry over an attempt by Brussels to toughen up a new directive by implementing it without proper consultation.

They have also accused the European Commission of rejecting regulatory advice over the introduction of the Alternative Investment Fund Managers (AIFM) directive.

One hedge fund insider told City A.M. the commission is trying to push through a “hardline” text of Level 2 of the directive – where the technical detail is worked out – by giving EU nations just a fortnight to respond.

“The member states are fuming because not only has the Commission rejected much of the ESMA [regulator’s] advice on implementation, it has also gone far beyond the original Level 1 agreement.”

The industry is particularly concerned about two areas – the protectionist implications of the “third countries” section, which would stop EU investors putting money into non-EU funds, and the way that the directive seeks to curtail leverage.

Last night Syed Kamall, the Conservative MEP for London, said the commission had acted “arrogantly” and “gone back” on what had been agreed previously. Nobody from the Commission could be contacted.