The European Parliament's Economic and Monetary Affairs Committee voted in March to introduce restrictions on the amounts mutual fund managers can be paid. But before a formal "proposal for a directive" can be made, the full Parliament must also approve the idea. It had been due to do so on June 11. This has now been delayed, most likely until the first week of July, according to a spokesman for Sven Giegold, the German Green member of the European Parliament, who is acting as the Parliament's rapporteur or "point-man" on the legislation.
In a statement this morning, Giegold said the delay was "in order to continue political negotiations" on two main issues: "managers' remuneration" - including the proposal to restrict fund managers' bonuses to a maximum of 24 months' salary; and "performance fee regulations" - which would ban, or at least severely restrict, the use of performance fees in funds sold to retail investors.
Opposition to the performance fee rules, meanwhile, is coming chiefly from German conservative or Christian Democratic MEPs, the sources said. One source close to the German asset management industry said the country's fund managers did not have a problem with rules governing performance fees but that the European Parliament's proposals had arrived at "five minutes to midnight".
Thomas Mann MEP, the German Christian Democrat acting as “shadow rapporteur” for the European Parliament’s main Conservative grouping on the issue, could not be reached for comment this morning.
Sharon Bowles, the UK Liberal Democrat MEP who chairs the Economic and Monetary Affairs Committee, said: “A one-to-one pay-bonus ratio for fund managers is looking a bit less likely than it was earlier this year".
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