The misdirected directive?

Germany's financial regulator, BaFin, tried to steal a march on its European rivals by implementing a new directive that should open the door to asset managers investing in new products and using over-the-counter derivatives. But did it get it wrong?

German asset managers got their first glimpse of the new rules that will revolutionise risk management in the industry at the end of November last year. Barely two months later, the rules came into force. Today, some German asset managers talk about the introduction of the directive as though they were recalling a particularly brutal mugging. “We had little time to react, BaFin was very strong, and our lobbying was not successful,” says Joachim Hein, head of risk control at asset manager Union