Brussels, 06/10/2009 (Agence Europe) - Jean-Paul Gauzès (EPP, France) submitted a working document on Tuesday 6 October on the main problems with the draft directive on alternative investment funds (see EUROPE 9892). The working document is accompanied by an indicative timetable that forecasts the draft legislation being adopted in first reading in the summer of 2010. The Commission and the MEPs on the European Parliament's economic affairs committee described the document as a good starting point revealing, commented the rapporteur, broad support for the idea that coherent, pragmatic, concrete and effective regulation is required.
The draft directive foresees that all the managers of alternative funds set up and operating in the EU must be licensed and supervised. The rapporteur says it would be a good idea to examine the thresholds at which fund manageress would be covered - managing a portfolio of €100 million or €500 million for some risk capital fund managers (no leverage, no ownership by investors for more than 5 years). Wolf Klinz (ALDE, Germany) would like proportionality rules to be added to the thresholds. Conservative British MEPs Syed Kamall, Kay Swinburne and Vicky Ford warned against over-strict rules that would restrict access to risk capital for European companies. As the draft directive covers all investment funds not harmonised at EU level, does that mean that any funds that are not UCITS are alterative?, asked Othmar Karas (EPP, Austria). José Manuel García-Margallo y Marfil (EPP, Spain) said he was worried about the directive being extended to cover funds that are not connected in any way with the directive's aims. Udo Bullmann of Germany and Robert Goebbels of Luxembourg (both in S&D) told those who wanted to restrict the scope of the legislation that the G20 believes that no systemically important player, no financial products and no country should be allowed to escape from legislation. Pascal Canfin (Greens/EFA, France) would like the thresholds removed from the legislation, and would also like to see measures governing investment capital funds.
The draft directive introduces an EU passport to help regulated fund managers to sell their products around the EU. Fund managers established in countries outside the EU whose legislation is deemed by the Commission as being equivalent to EU rules can operate in the EU three years after the new directive comes into force. The measures stipulating that only funds registered and managed by managers established in the EU may be sold in the EU could restrict investment options for EU funds, explained Gauzès. Klinz and Kamall were hostile to the idea of a three year transition period. Canfin said he backed the idea of equivalence in theory if the EU is able to export the EU law to increase standards in the industry, but doubted the Commission would be able to stand firm in the face of pressure from other countries. Bullman said it would not be possible to allow managers from outside the EU to work in the EU in line with lower standards. How the draft directive will mesh with other EU rules was also queried, like the MiFID directive, the UCITS directive and the EU supervisory reform package.
The timeline suggested by Gauzès is as follows: - public hearing on 10 November 2009: - draft report in early December; - vote by the EP committee on 12 April 2010; - three-way inter-institutional dialogue in May 2010; - and voting in plenary in July 2010. Sharon Bowles (ALDE, UK) said that two external impact studies would be submitted, one at the end of October rand one in November 2009. (M.B./transl.fl)