Monday, August 24, 2009

Update: FSA to Assess Cost of Proposed EU Funds Law

As reported by Reuters, the UK Financial Services Authority (the "FSA") has commissioned an external cost-benefit study to assess the possible impact the EU Directive on Alternative Investment Fund Managers, proposed earlier this year, may have on the sector's competitiveness. According to an FSA spokesman, the research is expected to be completed "later this year".

The FSA move comes on the back of intense political debate between the UK (Europe's major fund centre) on one side, and Germany and France on the other. The UK, which is strongly supported in its position by industry representatives, is believed to be attempting to tone down the proposed directive's requirements, fearing that the costs of the proposed regulation in its current form would far outweigh its benefits. On the other hand, France and Germany have criticized the proposal for stopping short of introducing a robust legislative framework for the industry.

The proposed directive requires approval by the European Parliament and Council before it becomes effective.