Despite protests from the UKÃ¢â‚¬â„¢s new government, a majority of European Union Finance Ministers have approved draft legislation of a new bill that will force additional regulations upon hedge fund managers operating within the EU. The Alternative Investment Fund Managers Directive as the bill is known, will require hedge fund managers outside the EU, to register with each country in which they intend to operate, before being permitted to market directly to investors. If passed the new law will also limit performance bonuses for fund managers.
The UK attempted to rally support to kill the draft bill, but was unable to secure sufficient support to vote the proposal down. Former UK Prime Minister Gordon Brown spoke against such a law last March saying that it could threaten LondonÃ¢â‚¬â„¢s position as a global leader in financial services. While noting BritainÃ¢â‚¬â„¢s reservations for the bill, few finance ministers offered sympathy.
Ã¢â‚¬Å“WeÃ¢â‚¬â„¢re a community and that means that there can be decisions against an individual member state,Ã¢â‚¬Â GermanyÃ¢â‚¬â„¢s finance minister, Wolfgang Schaeuble said in a press conference following the vote.
Before the draft legislation can be passed into law, an agreement must be reached between the EU Parliament, and each national EU government. This process would likely take at least a year.