EU Plans Would Limit Investors to 40% of Hedge Funds, FSA Says
Wednesday, January 27, 2010 : PermalinkBloomberg – As many as 40 percent of the world’s hedge funds won’t have access to European Union investors if EU plans to oversee funds and private equity are passed in their current form, an official at Britain’s regulator said.
Investors from the 27 member-state bloc won’t be able to access 40 percent of hedge funds and 35 percent of private equity firms under EU proposals because of so-called equivalence requirements, a Financial Services Authority official said, citing a report. The requirements test whether countries where funds are based have similar tax and legislation to the EU.
“It would drive legitimate business models offshore,” said Dan Waters, the FSA’s asset-management sector leader, in a speech in London published yesterday. “It cannot be a sensible outcome from the directive that investor protection is delivered at the expense of the protection of financial stability.”
