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Investors speak out against EU plans for fund regulation

INSTITUTIONAL investors yesterday rallied behind the hedge fund industry&rsquo;s efforts to combat the European Commission&rsquo;s (EC) draft directive on the regulation of funds.<br /><br />The National Association of Pension Funds (NAPF), one of Europe&rsquo;s most prominent institutional investors, said the directive in its current form would devastate pension schemes across Europe.<br /><br />NAPF chief executive Joanne Segars said: &ldquo;The directive, if passed in its current form, will reduce investment choice and mean that the return pension schemes can get for any level of risk will be reduced.&rdquo;<br /><br />&ldquo;Even a small reduction in return will have an impact on the affordability of defined benefit pension schemes,&rdquo; she added.<br /><br />The European Federation for Retirement Provision, which lobbies on behalf of pension funds, has also written to the EC asking for changes to the proposals, while the NAPF&rsquo;s Dutch and Irish counterparts echoed its stance.<br /><br />The Association of British Insurers (ABI) backed investors&rsquo; criticisms, saying it had &ldquo;concerns about the impact of the proposed directive on investor choice and the costs of compliance which will ultimately have to be born by savers.&rdquo;<br /><br />Criticism from investors comes just days after London mayor Boris Johnson called on investors to make their voices heard, rather than leaving it to more vocal hedge fund managers.