UK urged to stand firm against AIFM

THE government has been urged to take a stand against proposed rules from Brussels on hedge funds and private equity amid warnings the measures could cost the City £4.7bn.

As European Union finance ministers attempt to reach agreement on the controversial Alternative Investment Fund Managers (AIFM) directive today, industry figures made a last-ditch call on ministers to reconsider parts of the paper.

Fears revolve around the protectionist implications of the “third countries” section, which would put up barriers to overseas fund companies looking to sell products to customers such as pension investors within the EU. City insiders are also worried the AIFM regulations lump hedge funds and private equity funds together indiscriminately, resulting in overly harsh disclosure rules for certain vehicles.

Think tank Open Europe estimates the cost of complying with the new rules for UK businesses would add up to £4.7bn by 2020. Director Mats Persson said: “Ministers must have the courage to resist all forms of protectionism and populism. Failure to do so will cost Europe dearly.”

Conservative MEP Syed Kamall added: “We should not sign up to any agreement that’s not workable. I would like to see the government try to push back discussion of the directive to the next meeting of EU finance ministers in May.”