Strasbourg, 11/03/2010 (Agence Europe) - Negotiations at the EU Council of Ministers on the draft directive on the management of alternative funds are held up by disagreements over the rules applying to funds invested outside the EU by fund managers established in the EU; and how to deal with non-EU fund managers wanting to sell their funds in the EU (see EUROPE 10092). The Tuesday 16 March ECOFIN Council is expected to decide on both issues in a qualified majority vote (qmv). A compromise is reported to be emerging on keeping thresholds in the directive to exempt managers of up to €100 million of assets using debt for leverage effect (€500 million in other cases).
The United Kingdom is isolated in its rejection of the Spanish Presidency's approach to the measures for non-EU countries, describing them as protectionist. The Spanish Presidency suggests that Member States that allow the sale in their country of funds invested outside the EU but managed by fund managers established in their country should respect transparency rules and sign cooperation and exchange of information deals with the non-EU countries in question. The Presidency is not suggesting that such funds should be automatically allowed to be sold everywhere in the EU.
US Treasury Secretary Tim Geithner has written to EU Internal Market Commissioner Michel Barnier to warn him of the discrimination that would be brought about against US institutions if they had to face over-strict legislation to attract European investors or sell their alternative funds in the EU. A European Commission spokesperson responded on Thursday that the EU's proposals respond directly to the G20's decision to introduce regulation on funds with leverage effect to increase transparency and the responsibility of key market players. (M.B.)