This text comes after months of speculation about the Council work in AIFMD. The polemic “private placement” rules remain in place in the new draft so non-EU funds can be sold to professional investors subject to the rules of individual EU states.
Investors welcomed revised European Union plans to clamp down on alternative investment funds, saying the proposals were a workable compromise, Financial Times reports.
The latest draft comes after months of wrangling following the controversial first draft of a new EU alternative investment fund regime, outlined in April.
That provoked an outcry from many investors including pension fund managers and investment trusts, as well as private equity funds, hedge funds and regulators who said the plans were unworkable.
So-called “private placement” rules remain in place in the new draft, meaning that non-EU funds can be sold to professional investors subject to the rules of individual EU states.
The rules on depositaries, which would have been liable for losses incurred by sub-custodians under the previous draft, have also been redrafted and eased.
The new draft also addresses other contentious areas, such as restrictions on funds’ use of leverage.
However, during the hearing on AIFM several MEPs added that the Directive will be voted through co-decision which puts the Council and the EP on an equal footing. It means that we must not focus merely on what the Council is proposing or doing as the EP also needs to have its say.
The Council and the Parliament are working at different speeds and off a different version of the directive. It is quite possible that parliament could take a completely different view of things and go in another direction.
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