Lords launch inquiry into Investment Funds directive
05 August 2009
The House of Lords EU Committee have announced a new inquiry into the European Commission’s proposal for a Directive on Alternative Investment Fund Managers. The proposal is the Commission’s response to the pledge made at the G20 to regulate alternative financial markets such as hedge funds and private equity funds.
The Commission propose to create a regulatory regime for fund managers managing funds worth more than €100m with the aim of providing macro-prudential oversight of the sector.
There have been concerns raised that the Commission’s proposals will damage the status of the City of London as an international financial centre.
The Committee are inviting evidence from any interested parties with the closing date for written evidence being Wednesday 9 September. Some of the areas the Committee are seeking evidence on include:
- What economic benefits arise from Alternative Investment Funds? And what risks arise from them?
- Is there a need for a single regulatory regime for Alternative Investment Fund Managers in the EU?
- Is it appropriate to regulate Investment Fund Manager rather than the fund itself?
- Have the European Commission consulted adequately on their proposals?
- Will provisions strengthening disclosure requirements help create a more transparent market or do they go too far?
- What impact will the Directive have on the City of London and the EU as a whole as a leading location for Investment Fund Managers? Could it cause hedge funds to relocate outside of the EU?
- How does the directive compare to regulatory regimes outside the EU? In particular in the USA?
Commenting Baroness Cohen, Chairman of the House of Lords Committee on Economic and Financial Affairs, said:
"The proposals from the European Commission for regulation of Alternative Investment Fund Managers will clearly have a significant impact on how those funds operate both in the City of London and across the EU.
"While most people accept that the recent economic collapse requires new and fuller regulation of financial industries it is important that in the haste to regulate the European Commission does not end up producing any unintended consequences or damaging the financial services industry which is of significant importance to the UK economy.
"We would invite any one with a view on this issue to submit written evidence to the Committee by September 9th and when Parliament returns in October we will begin the process of taking oral evidence from a selection of witnesses."
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