Lord Baker said that the more the European proposal looks like the Obama proposal, the more we would welcome it, which shows the UK position relative to the current debate on the AIFM.
Lord Baker summarised from his point of view what has happened to date, following which there was time for a question and answer session.
Lord Baker presented the following overview of the facts:
“Back in July we had no European parliamentary involvement, because obviously the parliament had not formed, and we were at an extremely early stage of the Swedish presidency, so very little had happened at European Council level. There have been a number of significant developments since then. We have travelled far and wide across the EU, not only to reach out to investors who are going to be affected by the Directive but managers from other sectors of the investment management industry, because, as we all know, this Directive will affect others than hedge fund managers. We have also spent a lot of time with both the regulators and finance ministers across the Member States.
The purpose of doing that is to establish where national interests lie in certain key issues that are of interest to our industry. In summary, as a result of all of this activity and the Committee meetings which have taken place subsequently within the European Parliament, there does appear to be very widespread consensus now about the areas of difficulty with the Directive – which we have seen plastered all over the newspapers almost ad nauseum – but also the potential for areas where improvements could be made, and there does seem to be very, very strong consensus about where the principle areas of difficulty are. I will list them if you like, but they are quite numerous, and they start with “one size fits all” as a single overriding problem. The good news is that there does seem to be a very strong consensus – so it is not just special pleading amongst our managers’ community; these views are shared by investors and managers alike.
The difficulty is what happens next, because the nature of some of the difficulties is very severe and coming up with resolutions which are going to satisfy all constituencies is going to present a number of challenges. One idea I would like to leave with the Committee is that either we have a number of years of extremely detailed and technical discussion ahead of us which will involve better definitions, the consideration of how many sectors of the industry and which ones of them are deserving of a carve out, or else we have to retreat to a much higher level and try to do this on a principles basis, to get the Directive through much more quickly so that we can all get on with our lives.
Our industry has fully recognised that there is going to be a measure on this score. The more it looked like the Obama proposal, the more we would welcome it. We would like to see it on the statute books in that form so that we can move on. Part of our problem at the moment is that we are stuck in this sea of mud to do with all the technical difficulties.”
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