The original draft report of the competent rapporteur Jean-Paul Gauzès (European People's Party, EPP) had been strongly criticised by employee representatives. It provided that funds, which are outside the European Union, should be exempt from the scope of the Directive. In addition, the introduction of threshold values, which would have provided funds with a volume of less than 100 and 500 Million Euro respectively with the option of granting special national rules, would have given vent to great displeasure. Shortly before the vote in the Economic and Monetary Affairs Committee, the parliamentary parties reached a compromise proposal. Hedge funds providers are now obliged to disclose their business models and the remuneration of their managers. Apart from that, it is also required to provide information on any borrowing. The liability for possible losses (for example for mortgage loans, which cannot be paid back) may only be “passed on” once, and not several times as it has been the case until now. This proposal was accepted with the votes of EPP, Socialists & Democrats and the Greens. The final text of the decision now also requires hedge funds from third countries to adhere to the provisions of the Directive in order to be admitted in the EU.  

The Directive on Hedge Funds was also on the agenda of the meeting of the European Finance Ministers in Brussels. Some countries, in particular Great Britain are still against integrating funds from third countries into the scope of the Directive. In spite of this, the Council Presidency has been asked to negotiate with the Parliament, taking the concerns of certain Member States, in particular with regard to third country provisions and to present a final result by the end of July.

Further information

Press release of the European Parliament on the decision regarding the Report in the Economic and Monetary Affairs Committee