EUROPE - Further changes to the EU's Alternative Investment Fund Managers (AIFM) Directive are today being aired in Brussels by the Legal Affairs Committee in the European Parliament.

The committee, otherwise known as JURI, is due to vote this afternoon on amendments proposed by its vice-president, Austrian social democrat MEP Evelyn Regner in a 200-page document that draws attention "to a number of serious shortcomings".

The vote was postponed last week due to air travel disruption caused by volcanic ash from Iceland, while the Economic and Monetary Affairs Committee (ECON) meeting to discuss the draft Directive in relation to pensions and insurance has been postponed until May 11.

In the document, Regner states: "The proposal seeks to regulate fund managers, not funds themselves. Although this approach creates an impression of security, it fails to close a number of significant loopholes.

"What is more, managers of foreign funds who are not EU nationals would be able to invest in the EU without being registered or supervised."

Regner goes on to observe that at present it is impossible to determine in advance, on the basis of threshold values, which firms are systemically important and which are not. As the current crisis shows, it only becomes clear whether a firm is systemically important when it fails, she said. Regner believes the threshold values create a loophole, because it would be easy to circumvent the limits by simply dividing a fund into smaller units.

Proposals also include requiring AIFMs to disclose their remuneration strategy and make clear that it is geared to sustainable business success. Reliable, transparent assessment procedures applicable throughout the EU are also essential, she said. In cases where AIFMs are active in more than one country, the transfer of responsibility for oversight to a European authority "makes sense", Regner added.

While the AIFM mainly falls under the remit of the Economic and Monetary Affairs Committee (ECON), the JURI Committee can vote on decisions regarding disclosure compliance and liability.