EUROPE - European finance ministers have cleared the latest version of the Alternative Investment Fund Managers (AIFM) directive, sending it off for an expected rubber stamp by the European Parliament at its plenary session in early November.
The news marks the possible conclusion of a long-running and often acrimonious debate that dates back to April 2009, when the European Commission first proposed the text.
Jean-Paul Gauzès, European Parliament rapporteur for the directive, said he particularly welcomed the system to be applied to managers from non-EU countries.
He said he looked forward to convening another negotiation meeting next week and that he hoped the Parliament would approve the new text.
In a brief statement, the Council said the wording of its draft directive was aimed at "establishing a harmonised framework" for monitoring and supervising the "risks alternative investment fund managers pose to their investors, to counterparties, to other market participants and to the stability of the financial system".
The Economic and Financial Affairs Council said it would allow AIFM to provide services and to market funds throughout the EU single market, subject to compliance with strict requirements.
It also said the draft aimed to fulfil commitments made by the EU at the G-20, as well as the European Council's pledge to regulate all market operators whose activities might pose a risk to financial stability.
The Council described its agreed position as suitable for the Parliament to adopt it at first reading.
It added: "There is a large degree of convergence between the two institutions, and the Council hopes to be able to conclude the negotiations in the near future, on the basis of the agreement reached today."
In the UK, the Alternative Investment Managers Association said: "There is still much in the directive that will be difficult to implement for the industry, and there will be a heavy compliance burden the industry will have to bear.
"But the impact will be far less severe than if something close to the original proposal had been agreed."
Michel Barnier, internal markets commissioner, described today's agreement as "a real step forward", while French finance minister Christine Lagarde expressed hopes the directive would "impose discipline" on the markets.
"In future," she added, "we need to pay attention to compliance and harmonisation across the EU."