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The investment managers, who include Allianz, Axa, BlackRock and Fidelity, join a swelling chorus of critics of the technical standards that the EU has proposed as part of reforms of hedge fund regulation.
The fund managers have sent a letter to Michel Barnier, Brussels’ top official overseeing financial markets that has been seen by the Financial Times. “We are extremely concerned that the AIFMD standards will undermine the single market. We do not believe that such an outcome was intended by policy-makers, and fear the adverse consequences for European fund investors”, it said.
The industry also argues that the 110 pages of technical standards – highly-detailed rules – unpick some of the compromises that preceded the 2011 passage of the AIFMD. Their criticism was focused on new hurdles for non-EU fund managers and liability rules for banks who safeguard fund assets. The latest fund managers’ letter takes aim at a new issue. They are worried that the new standards make it illegal for a parent investment management company to delegate the bulk of its work to staff in other countries, both in and out of the EU.
While much of the public controversy over the AIFMD has focused on hedge funds and private equity, the rules cover a wide range of funds with more than €2.2 trillion assets under management. Retail funds, known as UCITS, also use delegation and they are even bigger, with net assets of more than €5 trillion.
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