Alternative Investment Management Association
04 July 2006
London, 4 July 2006: The Alternative Investment Management Association (AIMA), the leading global trade association for hedge funds, today welcomes the broad thrust of the ‘Report from the Alternative Investment Expert Group’ presented to the European Commission.
The Expert Group, made up of industry practitioners, was convened by the European Commission as part of its review and consultation on the European investment funds landscape. They have been considering ways to enhance the European framework for hedge funds and other investment funds.
The Group confirms that the prevalent “light-touch” regulatory approach has served the industry, its investors and the wider market well. Taking into account the level of expertise available across Member States and the fact that all industry participants are already effectively regulated, the Group suggests that additional regulation will sit uneasily with current business models and investment freedom and therefore would probably fail.
The Report highlights the current barriers to development and suggests several solutions, especially freeing up access for investors across Member States. Others include the removal of unnecessary and contradictory restrictions on institutional investors and recommending the passporting of expert services such as prime brokerage and fund administration.
Commenting on the experts’ report, Florence Lombard, Executive Director of AIMA said, “This is a detailed and thought-provoking report that sets out how hedge funds operate in Europe among a very mixed regulatory environment, why the leadership and innovations provided by hedge funds are important to the European investment sector and how excessive regulation could damage it.
The Group’s findings show a need for some of the more arbitrary and unproductive national regulations to be withdrawn and allow the MiFID (Markets in Financial Instruments Directive) regulations to take much of the strain of uniform, EU-wide, investment distribution. It highlights the inherent difficulties of trying to make hedge funds fit into the UCITS framework.
We are pleased that the Expert group is urging the EU authorities to approach the SEC about the issue of dual registration. AIMA has always felt it inappropriate that European hedge fund managers, already regulated by Member States, should have to register with the SEC. Recent events may, of course, mean that this is no longer required.
We hope the EC will recognise the need to be circumspect about introducing new legislation and will continue to support the lighter regulatory regime that allows hedge funds to make such an important contribution to the developments of the European investment management sector. We look forward to the expected EC White Paper on investment funds in the Autumn.”
The Expert Group’s report includes 11 recommendations which are attached to this release.
The Report can be found here.
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For further information, please contact Eoin Brophy, Hume Brophy Communications on +353 (0) 86851 5477
1. About AIMA
Founded in 1990, AIMA is a not-for-profit global trade association with corporate membership in 46 countries, including over 530 member companies in Europe. AIMA focuses specifically on hedge funds, managed futures and managed currency funds. More than 1000 corporate members (comprising 3500 individuals) enable the Association to create global tools for the benefit of its members, institutional investors and regulators. Its objectives are to increase investor education, transparency and promote due diligence and related sound practices, and to work closely with regulators and interested parties in order to promote the responsible use of alternative investments. AIMA’s membership includes fund of funds managers, institutional investors, hedge fund managers, prime brokers, exchanges, fund administrators, auditors, lawyers and other specialist service providers. Please visit us at www.AIMA.org.