Alternative Investment Fund Managers Directive
Encyclopedia
The Alternative Investment Fund Managers Directive COM (2009) 20 is a proposed European Union
law which will put hedge funds and private equity
funds under the supervision of an EU regulatory body. These kinds of business vehicle have not been subject to the same rules to protect the investing public as mutual and pension funds. Lack of financial regulation
is widely seen to have contributed to the severity of the global financial crisis. The European Parliament
voted through a final text of the Directive on 11 November 2010.
The right-wing think tank Open Europe
has estimated that the hedge fund and private equity industry contribute €9.2 billion in tax revenues to the EU economy every year, which would come under threat if the EU's AIFM directive would have been passed in its original flawed form.
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
law which will put hedge funds and private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
funds under the supervision of an EU regulatory body. These kinds of business vehicle have not been subject to the same rules to protect the investing public as mutual and pension funds. Lack of financial regulation
Financial regulation
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system...
is widely seen to have contributed to the severity of the global financial crisis. The European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...
voted through a final text of the Directive on 11 November 2010.
Overview
The AIFMD proposal includes the following reforms.- a private equity fund must appoint an independent valuer and an independent custodian.
- private equity fund with EU investors must disclose its business plan for a portfolio company to that company, its other shareholders and employees and make that information public.
- investors would not be able to invest outside the EU unless it was under an "equivalent" regime
- imposes limit to leverage for one time the amount of capital across a fund.
The right-wing think tank Open Europe
Open Europe
Open Europe is an influential eurosceptic think-tank and interest group, founded in London by some UK business people, with offices in London and Brussels. While Open Europe does not advocate British withdrawal from the European Union, it is critical of the process of European integration and has...
has estimated that the hedge fund and private equity industry contribute €9.2 billion in tax revenues to the EU economy every year, which would come under threat if the EU's AIFM directive would have been passed in its original flawed form.
See also
- Markets in Financial Instruments Directive 2004/39/EC
- Undertakings for Collective Investment in Transferable Securities Directives 2001/107/EC and 2001/108/EC
- Investment Company Act of 1940Investment Company Act of 1940The Investment Company Act of 1940 is an act of Congress. It was passed as a United States Public Law on August 22, 1940, and is codified at through . Along with the Securities Exchange Act of 1934 and Investment Advisers Act of 1940, and extensive rules issued by the Securities and Exchange...
- European company lawEuropean company lawEuropean company law is an emerging field of legal scholarship, which concerns the formation, operation and insolvency of corporations within the European Union. There is presently no substantive European company law as such, although a host of minimum standards are applicable to companies...
- UK company law and German company lawGerman company lawGerman company law is an influential legal regime for companies in Germany. The primary form of company is the public company or Aktiengesellschaft . The private company with limited liability is known as a Gesellschaft mit beschränkte Haftung...