EUROPE – The European Parliament has passed proposals aimed at introducing a European Union-wide passport for hedge funds.
The Parliament adopted the report by 344 votes for, 69 against and 24 abstentions.
“Under the plans, a special EU-wide regulatory regime will be set up to accommodate sophisticated alternative investment vehicles (SAIVs) which will include hedge funds and funds investing in property, currencies and commodities,” said a release from the Parliament’s monetary committee.
It said the move would encourage hedge funds to reside in the EU instead of offshore tax and regulatory havens.
"It is vital that we encourage hedge funds into the EU,” said John Purvis MEP, vice president of the Economic and Monetary Affairs Committee. Purvis, a UK Conservative, was the author of the Parliament's report on hedge funds.
“These new rules will go some way to coaxing investors back onshore and into a more supervised environment,” Purvis added. “Sophisticated investors will have an alternative way of investing at a reasonable level of regulation.”
“The current absence of a single regulatory market and the imposition of discriminatory taxes on hedge funds is clearly a deterrent to investors.
“A new EU-wide passport will give reassurance, whilst ensuring investors fully understand the risks they are taking in pursuit of the returns such funds can offer."
As at 2001, 446 hedge funds were managed in Europe – representing just 15% of the global total of hedge fund assets.