EU agrees on new hedge fund directive
Last Tuesday, Luxembourg was the scene of the adoption of new regulations on private equity and hedge funds by the Council of the European Union. A pan-European watchdog shall ensure transparency in the sector. Acting for the 27 EU countries, the new watchdog will issue EU licenses for foreign funds. The new directive will entail that private equity and hedge funds have to present more information about their products and the trading market. The new directive also implies bans on short selling. Regarding the next G20 meeting in November in Seoul, the EU can look forward to the meeting of good cheer. Luxembourg for Finance talked to Didier Prime, Asset Management Leader at PricewaterhouseCoopers Luxembourg.
LFF: Is the new directive for hedge funds an opportunity or a threat for Luxembourg?
DP: We belive that overall, this Directive will benefit to Luxembourg, we should consider it as an opportunity.
LFF: Are you convinced that the European Parliament will pass this directive?
DP: Now that main countries in continental Europe agreed on some particular issues, mainly the treatment of third country funds and third country alternative asset managers, I think that there is a good probability that the directive is voted in November. Unless the European Parliament does not accept this compromise
LFF: What are the most important topics of the directive?
DP: The most important topic of that Directive is summarized by the three main dates: 2013, 2015, 2018.
- 2013 for the implemantation of the Directive in Europe
- 2015 for the potential acceptation of third country funds in Europe, subject to ESMA approval
- 2018 for the end of the private placement national regimes in the different European Countries.
LFF: What are Luxembourg's main competitors for hedge funds?
DP: Clearly, Dublin will as ever be a strong competitor to the Luxembourg industry, they may be perceived as reacting quicker with more transparency concerning the time to market (especially the time needed to get feedback form the regulator).