EU nations override UK on hedge fund rules

news.yahoo.com...

European Union governments overrode British objections — and U.S. worries — by agreeing Tuesday to tighten rules for hedge funds, a move some fear will block American funds from the region and cause the lucrative industry to flee London's financial district.

The decision reflects Europe's new-found resolve to tighten oversight of financial markets and crack down on speculators with a heavier hand, though the final law may be softened as a concession to Britain's new government and its prime minister, David Cameron.

Hedge funds are lightly regulated investment vehicles that cater to rich and institutional investors. They promise high investment returns and tend to use complex trading strategies that can involve large amounts of leverage, or borrowed money.

The new EU rules would regulate managers of hedge funds, private equity, real estate and commodity funds for the first time, requiring them to register with regulators and hand over information on their trades. They will also have to set aside capital to counter risks — as banks do.

Crucially, the proposed rules don't give funds the automatic right to sell across the 27-nation bloc. U.S. Treasury chief Tim Geithner has complained that this was a "protectionist" move that could shut American funds out of the EU.

To finalize the law by July, governments must now seek a compromise between their version and one voted by the European Parliament. The result is likely to give more rights to foreign funds to do business across Europe.

Well I guess it is a good thing in the end, I still oppose them overriding the UK but atleast there will be tougher regulations.

[edit on 5/18/10 by Misoir]

Isn't this a good thing? Tightening up regulations so Governments no longer have to bear the risks of bailing out the banks.

Do I care if the financial ellite move from London, not really. They've hardly improved the country have they? Most I have ever come across are not very nice people. Let them move somewhere else.

Originally posted by Misoir
That is insane! How can they force something on the nation of United Kingdom!? Screw the EU, the Uk has their own free independent will seperate from the EU and they have no business forcing whatever they want on UK.

Its a little thing called the "Lisbon Treaty"..

ie. The EU constitution that came into effect on the first of December..

The Brits signed it so they have to live with it..

They are in the EU after all..

And in all fairness.. this type of Hedge fund speculators have played a massive role in destroying the global economy..

People can whinge all they like but the fact remains that making Hedge Fund owners register and announce their business strategy is the right thing to do in this economic climate.. Instead of people in charge of trillions in hedge funds trying to crash entire economies and brag about it afterwards..

George Soros is a prime example..

reply to post by woodwardjnr


I completely agree with tough regulations, but they are overriding the UK when they decided to do these regulations. They act like the UK has no say in what happens to their own country.

As much as I dislike to say it, the UK has no real power in Europe and not taken any notice of anyway.. Where as europe has a huge amount of power over the UK.. Rightly or wrongly that is the way it is, and no UK Gov will ever stand up to Europe..

reply to post by Misoir


They do have a say, they can leave the EU.

I don't see any reason why the rest of Europe should have to put up with a vulnerable ecconomy so that the UK can allow white collar criminals to carry out their shady deals for the benefit of a few rich people who immediately move the cash to countries that allow them to avoid paying tax.

Originally posted by Misoir
I completely agree with tough regulations, but they are overriding the UK when they decided to do these regulations. They act like the UK has no say in what happens to their own country.

**I would like to point out that the UK are already introducing a levy on their bankers so its not like it is completely against their will**

online.wsj.com...

The thing with Pan EU decisions like this is that each country gets a vote depending on their population.. Obviously the UK was on the losing end of that vote..

And the fact also remains.. If the UK started acting more in the EU, they would get an awful lot more power.. Instead of always being the antagonists, they could shape the union..

Which I feel many UK citizens want seeing as Clegg got so many votes and one of his big policies was to move Britain closer to the rest of the EU..

Trouble is that in the UK the casino is bigger than the factory and farm put togeather.

Any move that limits the amount of investing/gambling these banksters do is a move in the right direction as far as i see it.

CDS's across the world now have a nominal value of $1000tr and no i've not put in too many zeros and yes that is trillion.

Some will argue it's a zero sum game where most of the trades canceled out so we have nothing to worry about but my guess is we are being pushed into a meltdown so they can introduce the amro and it's personal carbon footprint tax.