Britain Worried About EU’s Stance On Hedge Funds

In what is seen as a defeat for the newly installed government in Britain, on Tuesday European Union finance ministers are expected to back tough new rules for hedge funds and private equity groups. These rules are being proposed in the backdrop of the lessons learnt from the global financial crisis. “I expect EU finance ministers to approve the position for negotiations with the (EU) parliament on hedge fund rules,” said Spanish Finance Minister Elena Salgado, who is presiding over the meeting on Tuesday as Spain currently holds the EU presidency. These new rules, expected to take effect around 2012, will require all managers of hedge funds to register and comply with reporting requirements. The steps are aimed at curbing risk-taking and pay awards. Britain, which has 80 percent of the euro zone’s hedge funds, is of the view that the new rules will curb choice for investors by making it harder for managers to offer funds across the euro zone comprising of 27 countries.