"Ideological rampage" on EU financial sector
Posted, June 02, 2008 @ 00:00
Proposals for EU regulations on private equity and hedge funds to force banking outside EU
Conservative MEP John Purvis has branded attempts by Socialists in the European Parliament to introduce oppressive regulations for hedge funds and private equity groups an 'ideological rampage' on the EU financial sector.
Conservatives are concerned that hedge funds and private equity groups are being used as scapegoats for financial problems experienced in recent months, evidenced by proposals to over-regulate the highly competitive financial services sector.
The proposals include strict regulations on the structure, establishment and activities of hedge funds and private equity groups.
Currently 80% of hedge fund managers in the EU are based in the UK and are regulated by the Financial Services Authority. Hedge fund groups have already introduced a voluntary code of conduct and have shown themselves to be highly cooperative with regulatory bodies such as the Financial Services Authority. Furthermore, the selling of assets by private equity groups is tightly regulated. However, any unreasonable or unjustified restrictions on their operations could force their migration to countries with more favourable regulatory climates.
Conservatives in the European Parliament firmly oppose all attempts to introduce unnecessary extra regulatory burden on the EU financial sector and support moves to strengthen competitiveness in the UK and the EU as a whole.
John Purvis MEP, Member of the European Parliament's Committee on Economic and Monetary Affairs, has tabled amendments calling for the deletion of all legislative proposals. He said:
"The introduction of unnecessary extra regulation on private equity and hedge funds is nothing but ideological rampage on the financial sector.
"Hedge fund managers and prime brokers in the EU are already regulated. The draconian legislation proposed by the Socialists would do nothing to help an already fragile economy and would cause the exodus of a very competitive sector of the financial services industry from the EU.
"The UK has fallen in competitiveness from 4th to 13th in the world. If anything, we should be freeing up our financial centres and boosting competitiveness."
The EU proposals, led by Danish socialist Mr. Paul Rasmussen, will be discussed in the European Parliament's Committee on Economic and Monetary Affairs on Monday 2nd June 3.00pm-6.30pm. Voting will take place at the end of June.