Industry to call for €50,000 minimum EU hedge fund threshold
An industry body formed to analyse the current organisation of the alternative investments business in the European Union (EU) will tomorrow call for no specific regulation of hedge funds save for a minimum investment threshold requirement of €50,000.
The hedge fund sub-group of the Expert Group on Alternative Investment Funds will make its recommendations made at the request of the European Commission (EC) in a report released tomorrow. However, some parties in the 16-strong group believed this threshold was too low, and said the EU should have limited manager regulation in line with that introduced on June 24 in the United States.
The body was set up at the recommendation of EC market and services commissioner, Charlie McCreevy, following the release of a green paper on investment funds published in July 2005. Members include ADI, Allianz, Axa-IMI, Barclays Global Investors, Citco, Citigroup-Tribeca, Deutsche Bank, Gartmore, Goldman Sachs, Lyxor, Man, Morgan Stanley, Pinoneer, PricewaterhouseCoopers, Rab Capital and Santander.
The body also included observers representing the interests of retail and institutional investors, the Alternative Investment Management Association, as well as observers appointed by the Committee of European Securities Regulators and the European Central Bank.
The industry group also struggled to form a consensus about whether or not investments in funds of hedge funds should be treated in Europe using a common set of standards. But, according to one member of the committee who spoke on condition of anonymity, the majority were against modifying the Undertakings for Collective Investment in Transferable Securities (Ucits) directive, despite countries such as Belgium, France, Germany and Spain having already implemented regulations regarding the sale of retail funds of hedge funds. The UK’s Financial Services Authority is currently reviewing the matter. The opponents fear that some form of regulation of funds of hedge funds would open the way for the supervision of the underlying funds, or their investment managers – as took place in the US. Instead, the group will propose a set of voluntary rules that a number of parties are sceptical will work without the support of a EU directive. There is also concern about the likelihood of the expert group’s €50,000 minimum investment threshold recommendations being enshrined into law. “McCreevy is reluctant to push for new European laws for asset management as he thinks it is very hard to implement them – the focus at the moment is on implementing what is already there,” said a party familiar with the expert group.Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Solvency II
Lack of transposition to delay Mifid II enforcement
Some states won’t have adopted directive before June, making rule-imposition difficult, say lawyers
Capital and funding
Quants propose KVA and FVA accounting framework based on Solvency II regulation
Testing interest rate models for Solvency II applications
Alexey Botvinnik and Vladimir Ostrovski propose a validation method for interest rate models
Eiopa cuts matching adjustment risk margin
UK insurers welcome additional capital relief
Solvency II volatility dampener ineffective for euro periphery
Stress tests expose flaw in formula to calculate volatility adjustment
Solvency II technical draft too harsh, firms claim
Industry representatives call on Eiopa to soften draft specifications
Commission 'must ensure proportionality of Solvency II' rules as MEPs give green light to new regime
Omnibus II approved by European Parliament
EC to restrict deferred tax assets in Solvency II
Rules expected to be tightened on determination of future profits