Drafting of the controversial Alternative Investment Fund Managers (AIFM) directive reaches a critical phase today with a vote in the European parliament. It will be discussed at a council level tomorrow before passing to the European Union finance ministers for rubber-stamping on 18 May.
Hedge fund managers and private equity dealmakers worry the prolonged transition to a fresh government following the general election will leave Britain powerless to resist the new rules, which have been widely criticised as “protectionist”.
Syed Kamall, Conservative MEP for London, said the incoming UK government may not be ready to concentrate on the complex legislation within weeks of taking power. He said: “The next step then depends on whether other countries are sympathetic to delaying the vote on 18 May, but a lot of countries just want to get this off the table. They’re sick of it.”
Lisa Cawley, a regulatory partner at Kirkland & Ellis who has followed the directive closely, said: “If the thing is going to be changed into a shape that’s workable for the UK industry, it really needs a big impetus over the next few weeks. The government needs to drag its heels.”
Employers group the CBI has warned the rules could harm companies that are already struggling with the economic downturn and harm employee relations. Deputy director general John Cridland said additional bureaucracy and forced disclosure of commercially sensitive information would impede firms that should be encouraged to help foster economic recovery. In particular, companies owned by private equity would be put at a disadvantage, the CBI argues.