ECON Committee debate on AIFMD compromise amendments – no worries about postponing ECOFIN’s AIFMD debate
18 March 2010
Postponing ECOFIN’s AIFMD debate will give strategic advantage to the Parliament in the upcoming negotiations. Gauzès stressed he wants to stick to the timetable and proposes, among other things, to include an annex with the exempted funds applying the proportionality principle.
Jean-Paul Gauzès (EPP/FR) is not worried about the postponement of ECOFIN’s AIFMD debate as it will give a certain strategic advantage to the Parliament in the upcoming negotiations. This view was widely shared by the shadow rapporteurs. Gauzès understands that the approaching general elections in the UK play a role and that the Prime Minister does not want to take a decision under his mandate. Gauzès is nevertheless confident that the Spanish Presidency will work out a compromise and the Council will reach an agreement soon. He reiterated that he wants to stick to the timetable.
Gauzès presented his compromise amendments and made the following remarks/proposals:
· Include an annex with the exempted funds applying the proportionality principle; thresholds should be also introduced to take into account small funds and small private equity firms.
· Improve supervision and regulation in addition to preventing systemic risk, since a crisis could emerge from other types of sources.
· On third countries, strict criteria on equivalence should be applied. He appreciates some member states’ fears that the Commission is not strong enough to provide equivalence standards. He advocates a transitional period to meet the equivalence criteria. If a third country fund does not comply with it two possible situations could happen: either the third country will not be able to market its fund in the EU and/or the manager will be able to market the fund under private placement regimes in a specific member state.
· The supervisory body needs to have some oversight on the leverage of the Fund. If financial stability is at risk, then the financial authority will be allowed to introduce a limit on the leverage and the fund will have to apply to it.
Robert Goebbels (S&D/LU) believes that the directive should not have any exemptions as it will create regulatory loopholes. In his view it is not the size of a fund that poses systemic risk. He said it had been demonstrated that “damage is done when hedge funds hunt in a pack,” whether they are big or small.
Wolf Klinz (ALDE/DE) said that there should be exemptions if the funds exempted were well regulated under national regimes and just operating in that national market. On third countries, he believes that national placement regime should be valid. He made a (surprisingly) critical remark, saying that the directive should not punish hedge funds, but that hedge funds should not expect any sympathy when they speculate against Greece or the Euro and should not come to MEPs now and ask for exemptions! This remark shows how much the Greek crisis (or at least the media coverage of the crisis) is negatively affecting the opinion of reasonable MEPs.
Pascal Canfin (Green/FR) proposed introducing ESMA as the institution to determine which will be the equivalence standards that funds have to comply with. On the transitional period to apply the equivalence criteria, he believes that five years is too long and the EC will lose credibility by not introducing a tighter deadline.
Syed Kamal (ECR/UK) wants to keep national regimes so as to allow third countries managers to market their funds in case they do not meet the equivalency criteria. He proposed tackling short selling horizontally and not just for AIF.
Peter Skinner (S&D/ UK) said that all funds should be included in the directive. On the depositary issue, he reminded the Committee of the Maddoff case and stressed that it is of utmost importance to have an independent depositary.
