Financial Regulatory Forum

FACTBOX-How European rules will curb hedge funds

May 19 (Reuters) – The European Union’s 27 countries and the bloc’s parliament agreed to tighten controls of hedge funds and private equity this week.

Negotiations will now begin between the two to hammer out a final version of the law to regulate the secretive industries by 2012.

Although some issues remain contentious, such as how the new law will treat foreign funds, both parliament and European countries have committed to set up broad controls on a sector many suspect exacerbated the financial crisis.

Here are the highlights from the new law:

* The directive does not lay down a rigid code of rules with caps on borrowing or pay but sets up a “regulatory and supervisory framework” for watchdogs to police hedge funds and private equity.

* It will put hedge funds under the eye of what one senior industry figure dubbed ueber-watchdogs, giving those authorities the power to demand closely-guarded information about how the fund invests or borrows as well as to intervene with curbs.

EU assembly rejects U.S. bank data deal on fighting terrorism

BRUSSELS, Feb 11 (Reuters) – The European Parliament rejected on Thursday an agreement with the United States on sharing bank data, snubbing appeals from Washington for help in counter-terrorism investigations.

A nine-month interim agreement went into force provisionally at the start of February but deputies from Liberal, Socialist and Green groups had opposed it on the grounds that it failed to protect the privacy of EU citizens.

Washington will now have to seek other ways to access information on money transfers in Europe until it can negotiate a permanent agreement with the EU. It says such data is vital to track terror suspects.

EU parliament backs creation of bank crisis fund

By John O’Donnell

STRASBOURG, France, Feb 9 (Reuters) – The European Parliament is set to back a proposal that would force banks to pay into an emergency fund designed to help cope with future financial crises, a document seen by Reuters shows.

Earlier this year, Sweden’s finance minister called on European counterparts to follow U.S. President Barack Obama’s lead with a bank tax to recoup the cost of propping up the industry — an idea that Germany is now considering.

The European Parliament, a powerful institution that will write any new bank tax into EU law, is set to give the idea a thumbs up, according to senior members of the assembly.

EU assembly may back U.S. bank data deal – sources

Wanted for financing terrorism

Wanted for financing terrorism

By Marcin Grajewski

BRUSSELS, Feb 8 (Reuters) – The European Parliament may approve a disputed deal with the United States on sharing bank data in the fight against terrorism if it is promised a say in future talks on the issue, parliamentary sources said.

The EU legislature’s civil liberties committee rejected an interim agreement on sharing data on cross-border bank transfers on the grounds that it failed to protect the privacy of European Union citizens. Washington says access to the information is crucial to combat terrorist financing.

But the full assembly may ratify the pact in a vote due on Thursday if EU governments and the European Commission guarantee that the parliament will be allowed an unprecedented role in negotiations on a future, permanent agreement.

from Global News Journal:

Brussels’ MEPs ready to duke it out with bankers

Every new year brings resolutions, and the European Parliament is no exception.

Often derided as a multi-lingual talking shop, the institution is feeling newly invigorated by some fresh faces and by the European Union's Lisbon reform treaty, which came into force late last year and gives the 736-member parliament more say in drafting laws and acting as a check on legislation.

Almost immediately, parliamentarians were letting their voice be heard, forcing Bulgaria to withdraw its nominee for the European Commission last month because she wasn't seen to be up to the job. They also look ready to block an agreement between the EU and the United States on sharing data on bank transfers, and are really beginning to show their teeth when it comes to financial sector reform.

It's one aspect of the latter move -- reported exclusively by Reuters on Monday -- which is set to cast MEPs in the role of banker-bashers-in-chief and could put them on a collision course with national governments.

EU economy, tax nominees may face second grilling

By John O’Donnell

BRUSSELS, Jan 14 (Reuters) – One of the European Union’s top lawmakers has said she may demand a second hearing to quiz the bloc’s designated tax and economics chiefs before the committee she leads decides whether to approve their appointments.

The remarks by Sharon Bowles, who leads the influential economic and monetary affairs committee, cast uncertainty over the line-up of the next European Commission, in particular the would-be tax chief, who has already faced criticism.

“I would have liked more questioning time with him,” Bowles said of Algirdas Semeta, the Lithuanian candidate to take charge of EU taxation whose answers at a European Parliament hearing were described by socialists as unconvincing.

EU executive to target derivatives speculation

(Adds more detail on derivatives legislation)

BRUSSELS, Jan 13 (Reuters) – Speculation in commodity derivatives has been “scandalous” and needs to be regulated carefully, the European Union’s nominee for chief financial watchdog said on Wednesday.

“Why do we have this speculation we have had over the last two to three years in raw materials,” Michel Barnier, EU internal market commissioner-designate, said.

“I am talking about speculation which to me is scandalous on agricultural raw materials … We have to do something about that,” Barnier told a confirmation hearing in the European Parliament.

EU’s Barnier says will mull short-selling curbs

By John O’Donnell

BRUSSELS, Jan 13 (Reuters) – The European Union’s designated financial services chief has pledged to examine curbs on short-selling and extend a planned regulatory shake-up to every corner of the industry, blamed by many for the economic crisis.

Outlining his plans to push through a welter of rules that will tighten the policing of banks as well as curbing runaway borrowing, Michel Barnier said: “We need to turn the page on an era of irresponsibility.”

“We are going to reform. No market, no financial player … should be able to escape. I will not shy away from the difficult subjects of sanctions and short-selling.”

New EU finance watchdogs seen muzzled on companies

By Jonathan Gould
FRANKFURT, Nov 18 (Reuters) – Three new pan European Union financial watchdogs being set up next year are expected to have limited powers when it comes to individual markets and companies, officials said.

(more…)

EU Parliament report slams hedge-fund directive

By Laurence Fletcher
LONDON, Nov 6 (Reuters) – A report for the European Parliament attacked a proposed EU directive to regulate hedge funds as “poorly constructed, ill-focused and premature”, in a blow for lawmakers who have demanded tough rules for the sector.

(more…)

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