Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-11-10-Speech-3-131"
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"en.20101110.16.3-131"2
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"Mr President, ladies and gentlemen, after the outbreak of the crisis, the European summit and then the G20 launched an appeal to regulate all segments of the financial market in hedge funds. The Commission quickly made proposals, but lobbying of a rare intensity made some political decision makers reluctant to proceed with regulation. The United Kingdom stood up to protect hedge funds located in nearby or remote islands. France, the self-proclaimed champion of international regulation, has fallen back into its usual protectionism.
In Parliament, it was, primarily, the liberals who tried to oppose this legislation. Mr Verhofstadt’s group, which is normally so pro-European, suggested rejecting the Commission’s proposal completely. Thanks to the rapporteur, Mr Gauzès, and thanks to the coalition in the Committee on Economic and Monetary Affairs consisting of the Group of the European People’s Party (Christian Democrats), the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament and the Group of the Greens/European Free Alliance, which was even supported by the Confederal Group of the European United Left – Nordic Green Left, a substantial majority position was put together. Twenty-one trialogues later, and thanks to the personal commitment of Mr Reynders and Commissioner Barnier, Parliament’s negotiators arrived at a proposal for a directive, which is a notable step forward, especially in the medium term.
This is because we will have to wait until 2018 to have an internal market which imposes the same duties and obligations and also confers the same rights on all funds. The European regulation will be implemented from 2013. There will be an increase in the powers of the European regulator ESMA, to which the directive will grant no fewer than 72 intervention and supervision powers. It must be stressed that this directive is the first European legislative act to regulate hedge funds and private equity. It will ensure considerable protection for investors – not just professional investors, but also citizens investing their savings in financial products.
There will be very specific rules on risk management and cash management. There will be more transparency and more information for investors on the strategies followed by managers. Leverage will be monitored, with managers having to announce in advance their own limits for employing debt leverage. The regulators will be able to intervene if too risky a strategy is employed. The gold plated remuneration and bonuses of managers will be limited and will not be able to be cashed in full immediately. The directive will impose more transparency on private equity funds. These funds will be welcome to finance the real economy. However, the directive will seriously limit the scope for vulture-like funds to divide up companies. There will be a period of two years in which the capital and some of the reserves of the company acquired will not be able to be distributed to new proprietors.
In addition to this ‘lock-in’, the company’s staff will be consulted, and the country in which the fund is registered will be informed about the business strategy of the buyers. In summary, the directive can be improved, Mr President, but the socialists and the democrats will give it their support, because it will bring a lot of light into the dark hole of international finance that alternative funds have represented up to now."@en1
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