Brussels, 27/09/2010 (Agence Europe) - Meeting on the morning of Monday 27 September for an informal trialogue, the Belgian Presidency and representatives of the European Parliament made no progress over the controversial issue of third countries in negotiations for the proposed directive creating a framework for the managers of alternative funds. “We are at loggerheads”, acknowledged Pascal Canfin (Greens/EFA, France). According to Jean-Paul Gauzès (EPP, France), the member states should give their prior agreement before any further compromise proposals are negotiated with the Euro MPs.
Late last week, the Belgian Presidency tabled a proposal for a compromise on the treatment for third countries. This proposal, which the national experts will discuss for the first time on Wednesday, suggests the possibility of issuing a regulated European passport for third-country funds. The fund managers in question would be established in the EU and would undertake to observe all provisions of the future directive. They would have to notify the supervisors in the host and distribution countries of their intention to sell a non-European fund. Cooperation agreements between the member states and the third country of origin of the fund would also have to be signed in matters pertaining to supervision, taxation, fighting money laundering and market access. The Belgian Presidency is also planning transitional rules (at least five years) allowing a member state to continue to authorise the distribution of third-country funds on its territory, on a case-by-case basis.
By proposing the conditional issuing of a European passport, the Belgian Presidency is distancing itself from the political agreement in principle reached under the Spanish Presidency in the spring, which left it up to the member states to decide whether or not to authorise a third-country fund manager (EUROPE 10141). This proposal is not much to the taste of France, which remains “head-on” opposed to any notion of a European passport. Paris is, moreover, getting ready to make counter-proposals, possibly as early as this Wednesday, to add to the agreement in principle of the Council. Proposals will be tabled on private investments (ways of creating a framework for the activities of a salesperson wishing to distribute a product) and passive sales (possibility for an investor which has not been canvassed to purchase products), which the Council's agreement does not touch upon.
In his address to the EP, Jean-Claude Trichet stressed the importance of avoiding regulatory discrepancies between Europe and the United States, which would entail the risk of leading to “regulatory arbitration” within the industry. The president of the European Central Bank, who is in favour of greater transparency, recognised the need for supervisors and the academic world to know more about “systemic elements of instability which can lead to 'herd behaviour' on the part of institutions with strong leverage effect”. (M.B./transl.fl)