Economic and monetary affairs
Just two days after the Council shied away from taking a decision on regulating hedge funds and private equity, MEPs moved ahead with their discussions on the legislation and pledged to stick to their timeline for adopting the EP’s position.
"We should not wait for the Council. By continuing our work on schedule the Parliament will be able to produce a text which will provide a good basis for the other institutions" Jean-Paul Gauzès, the French MEP responsible for steering the package through Parliament said on Wednesday. The other MEPs sitting on the EP’s economic and monetary affairs committee echoed this feeling.
A set of compromise amendments were presented by Mr Gauzès and subsequently discussed. These new proposals are expected to drastically reduce the exceptional volume of amendments initially put forward and will make the discussions and vote much more manageable.
A good EP consensus
The compromise proposals presented on Wednesday cover all controversial issues including the scope of the directive, leverage, funds and fund managers based in third countries, the liability of depositaries, and also how to deal with private equity funds. Rounding up the discussion, Mr Gauzès said that in all probability a good consensus would be reached.
Scope
Specifically on scope, the newly proposed deal maintains that all non-UCITS funds must be covered. However distinctions between funds will be provided for, with certain funds being regulated more lightly according to rules also defined in the new proposal.
Third country issues
On third country issues, the compromise proposal upholds the transition period idea previously proposed by Mr Gauzès. During this period, the Commission would search for regime equivalence with non-EU countries. If equivalence is deemed to exist, the funds can be marketed in all Member States. If no equivalence is found with a country, investors can invest on their own initiative in non-EU funds from this country. Moreover, such funds created before January 2010 can continue to be marketed in the EU through the private placement regime. Fund managers outside the EU whose country has no equivalence recognised will be barred from EU marketing. EU investors will also be forbidden from investing in funds under the responsibility of these managers.
The proposed position is to be voted on in April in the Economic and Monetary Affairs committee. It is then expected to be passed on to the plenary for a vote in July.
