A stir is currently caused in Brussels by a draft of the Commission on regulating so-called “alternative investment funds”, which also include hedge funds and private equity funds. The news portal Euractiv has already published a draft of the Commission proposal on its homepage, which was only supposed to be officially presented next week. At the same time, Euractiv published a letter to Commission President José Barroso, which was drafted by the leaders of the Social Democratic group in the European Parliament as a reaction to the Commission proposal.
In their letter, Poul Nyrup Rasmussen, Martin Schulz and Pervenche Berès accuse the Portuguese to have broken his promise and to have presented a draft, which is full of loopholes. Rasmussen’s main point of criticism - he also was the rapporteur of a Parliamentary Report on hedge funds and private equity - is that the draft only provides for a mandatory registration of fund managers, not, however, of the funds themselves and that the planned registration was nothing more than a formality. Apart from that, the Commission’s draft would also merely request that only funds with an investment volume of over EUR 250 million would be obliged to register. The Social Democrats regard this value as being too high.

The conclusion by the Social Democrats: it would be a gross political error to adopt the draft in its present form on 29th April as Barroso would break a promise that he had made to the European Parliament. He should come out in favour of removing the current loopholes from the draft. For the Social Democrats, the regulation of hedge funds and private equity would be a subject of utmost political importance and they would not rest until a satisfactory solution had been found. The AK too - within the scope of the consultation of the Commission - has come out in favour of a complete regulation of the activities of hedge funds and private equity funds.

Further information:

Link to the Euractiv article with Commission’s draft and PSE letter