Brussels, 07/04/2010 (Agence Europe) - In a second letter to the German, British, Spanish and French finance ministers earlier this week, US Treasury Secretary Timothy Geithner again expresses concern about the possible negative impact on the US finance industry of the draft EU directive on alternative investment fund managers (the draft AIFM directive). “I understand that the draft AIFM directive currently under discussion in the Council would discriminate against third country funds and fund managers by denying them the opportunity to access the EU single market via a passport approach, which would be limited solely to EU funds and fund managers,” he explains in the letter which this newsletter has seen.
Geithner says that the US is “actively implementing its G20 commitment to strengthen regulation and oversight of hedge funds… our regime will treat all advisors and funds operating in the US equally, regardless of their origin - domestic or non-US”. The regime will require “all advisors to hedge funds… whose assets under management exceed a modest threshold to register with the SEC (Ed: Securities Exchange Commission) under the Investment Advisors Act. The registered advisers would then be required to report enough information on their managed funds so that regulators can assess whether any fund poses a threat to overall financial stability by virtue of its size, leverage or interconnectedness... Firms that are deemed systemically important would be subject to heightened supervisory scrutiny and prudential standards, including higher capital, along with stricter liquidity and leverage rules”.
In early March 2010, the US government warned Europe for the first time against introducing rules that discriminate against the financial industry from outside the EU. A few days later, an ECOFIN Council meeting agreed on the draft directive currently on the negotiating table. In its second compromise bid, the Spanish Presidency did not include the idea of granting an EU “passport” to fund managers from outside the EU or to funds from outside the EU that are managed in the EU. Under pressure from the United Kingdom, it withdrew the issue from the agenda of the meeting in question. (M.B./transl.fl)