Money managers under the microscope
As you’ve probably noticed, there’s no shortage of regulation in the wake of the biggest financial crisis in 80 years.
IOSCO has been fleshing out pledges made by G20 leaders while the European Commission has put forward its highly-controversial draft law on hedge funds and private equity. Meanwhile the EU is formally reviewing MiFID next year.
Some critics already say there has been little consultation with the industries affected and insufficient co-ordination between the different regulatory bodies.
According to Louise Forrester, consultant at law firm Gide Loyrette Nouel, this result is, rather unfortunately, likely to be one big regulatory mess that wily firms will be able to take advantage of.
After draft laws from the European Commission, which have been attacked by almost the entire UK hedge fund industry, IOSCO‘s proposals — including registration of managers, disclosure of systemically-important information to regulators, registration and supervision of prime brokers — must seem like a walk in the park.
Disgruntled London-based hedge fund managers annoyed by the prospect of tougher EU rules and higher income tax shouldn’t pack their bags and fly to Geneva just yet, according to law firm Katten Muchin Rosenman Cornish.
At a breakfast briefing at London’s plush Capital Club this morning, legal experts said further details and amendments to the European Commission’s draft directive last month were likely, but said it was too early to decide to relocate.
The horse-trading is over (for now) and the EU has published its draft directive on regulation for the hedge fund and private equity industries. EU commissioner Charlie McCreevy must be doing something right as his plans have angered parties on both sides of the fence.
The Alternative Investment Management Association is furious after claiming political manouevering has riddden roughshod over its own efforts to drive a “proportionate” industry-led solution which promised increased transparency. The Party of European Socialists (PES), meanwhile, appears equally frustrated.
The seemingly endless drama of financial regulation has frequently fixed the spotlight on hedge funds, but there could yet be a twist in the tale.
At a breakfast briefing this morning at the City of London’s plush Capital Club, law firm Katten Muchin Rosenman Cornish suggested the beleaguered hedge fund industry could even benefit from tighter rules.