ECON Committee – 06 October 2009 - AIFM exchange of views
08 October 2009
The second exchange of views on the Alternative Investment Fund Manager directive has highlighted the divisions and difficulties. Wolf Klinz remarked that hedge funds represent just one seventh of the funds which are affected by this directive.
The second exchange of views on the Alternative Investment Fund Manager (AIFM) directive demonstrates the divisions and difficulties implied by this debate.
Wolf Klinz (ALDE, DE) remarked that hedge funds represent just one seventh of the funds which are affected by this directive and thus they are over-represented in the debate. For instance, property funds represent the same amount as they do and they have been somewhat overlooked. He then said that there remains a problem with the one size fits all approach in this directive and it will thus require a lot of amendments if it is to work in practice.
Syed Kamall (ECR/UK), shadow rapporteur, highlighted the risk of creating unintended consequences for many stakeholders. He called on MEPs to pay attention to the private equity industry which rescues many companies. Such companies risk collapse without these types of investments. He also raised the concerns of the Cayman Islands, in particular, as they have asked him how they can comply with the equivalence criteria when a third country AIFM works in the EU market.
Arlene McCarthy (S&D/ UK) is worried about the broad coverage of the directive. She wondered whether there was a more efficient way to regulate AIFMs and to focus more on certain types of alternative investments. Moreover, she remarked that there is an overlapping risk of the existing legislation and some inconsistencies that may arise with other regulations such as UCITS or CRD.
Kay Swindburne (ECR/UK) pointed out that in Europe risk capital is already very limited and that some high-tech small companies are very concerned about the impact AIFM directive will have on the industry, since it will be even harder for them to find investors willing to take on the risks of such small – medium companies.
Vicky Ford (ECR/UK) added that the Commission paradoxically states that it wants to pursue the objectives of the Lisbon Agenda, yet creates barriers for these types of companies through the AIFM directive.
Olle Schmidt (EPP/ SE) pointed out that the European Parliament is also responsible for the Commission’s better regulation initiative. In the UCITS directive there is a long and continuous dialogue with the industry, but in the AlFM directive the EP is not consulting properly with the industry. He openly disagreed with the timing presented by Gauzes and said that the trialogue is an opaque procedure; he would like to see a second reading. He emphasized that there is no need to rush through the directive.
Sharon Bowles (ALDE/ UK) asked the Commission to provide the Parliament with a table of all the current legislation regulating the alternative investment sector, such as UCITS, MiFID, CRD, etc, in order to see the interaction among them, as well as the potential conflicts. She also mentioned that there will be two more impact assessments, one at the end of October and the other at the end of November. These two impact assessments will compensate for the fact the Commission will not be undertaking any.
The Swedish Presidency is working hard on the AIFM directive and has released an issue note presenting proposals to the conflicts contained in the current draft directive.
The Commission, represented by Ugo Bassi (DG MARKT/ IT), made three points. Firstly, the objective of the directive is to have a wide approach and then try to differentiate more, if needed, but without falling into the trap of describing every single difference. Secondly, the Commission wants to avoid the risk of having an overlapping regulation, but at the same time it does not want to leave gaps unregulated. Thirdly, concerning third countries, the EC’s proposals are based on the traditional scheme of equivalence meaning that all EU managers will have to comply with certain requirements. As for third country managers, they are able to access the EU market with the equivalent conditions that are applied to the EU managers. With this equivalence scheme the Commission wants to put the European managers and foreign managers on an equal footing.
Jean-Paul Gauzès (EPP/FR) concluded by saying that he had noted the main concerns and would take them into account when preparing his opinion report. He summarized the main opinions and said that the broad majority feels there is a need for regulation on the AIFM, that this regulation should be coherent and pragmatic, and that there should be a clarification and diversification of the rules in order to consider the different targets.
