New rules for hedge funds and private equity firms agreed in Brussels will see an increased cost for investors, according to reports.
The Financial Times reports the new rules will impose capital and disclosure requirements on “alternative” fund managers, leaving the industry facing more proscriptive rules and higher compliance costs in the Europe than in America.
“The directive is imperfect legislation. It will impose unnecessary cost for our investors”
Uli Fricke, European Private Equity and Venture Capital Association chair, says: “The directive is imperfect legislation. It will impose unnecessary cost for our investors.”
Managers will also have to comply with rules around depository arrangements, asset stripping and pay, though those handling smaller portfolios will face much lighter treatment.
The directive must be adopted into national law by January 2013 and after that date approved fund managers will be allowed to market their funds across Europe without having to seek approval in each country. (article continues below)
The package was agreed by MEPs, member states and the European Commission over the past week.
It must still be approved by the full European Parliament and member states, however this in not expected to raise any difficulties.
Michel Barnier, EU internal market commissioner, said: “Today, the European parliament and member states have found an accord.”
He added: “This will introduce for the first time European regulation of managers of alternative investment funds.”