Hedge Fund Law Opposed by U.S, U.K. Set for EU Votes

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A European Parliament committee may approve a proposal tonight to force hedge funds outside the EU to agree to transparency standards in exchange for a so-called passport to market to investors in the 27-nation bloc. EU finance ministers are scheduled to vote tomorrow in Brussels on a version of the rules that would require funds to register separately in each country. Both proposals have been opposed by the United States and the United Kingdom.

Finance ministers in March put off a vote on their proposal under pressure from the U.K., which sought to modify the law, known as the Alternative Investment Fund Managers Directive. Spain, which holds the EU’s rotating presidency, said last week it would push ahead with the legislation without U.K. support.

Hedge funds and private equity firms are under the scrutiny of lawmakers worldwide, who say they are partly to blame for the financial crisis. Then U.K. Prime Minister Gordon Brown warned in March that the EU rules may threaten the country’s pre- eminence in the financial services industry.

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Hedge Fund Law Opposed by U.S, U.K. Set for EU Votes (Update1) - BusinessWeek