Unlike past years when different topics relating to asset management were discussed, this year’s conference was devoted to the proposed EU Directive on hedge funds. As a result the five separate panel sessions managed to say the same thing (the draft directive is not fit for purpose) over the eight hour conference.
Two important messages came out including one surprising announcement from Jean-Pierre Jouyey, the Chairman of the AMF (the French securities regulator).
First: The FSA see the need for an AIFM Directive and everyone has to accept that there will be an AIFM directive.
Second: If you don’t like the draft (and the FSA do not) then attacking Johnny Foreigner in the style of Boris J will not help the situation. What needs to be done is to present sound technical reasons why a particular article in the draft needs to be changed and to provide the EU with an alternative article (this was supported by the FSA).
J-PJ assured us that the French are not attempting to undermine London’s role as the AIF market; that it does understand the typical UK model i.e. FSA regulated managers in the UK with a fund based offshore; and that parts of the draft AIFM Directive could do with revision.
One example is that the prohibition on marketing offshore funds could be lifted where the investor approaches the manager, rather than the other way around.
Another example would be allowing professional investors to invest in offshore funds provided that the fund is managed by an EU asset manager or the country in which the fund is domiciled has signed a cooperation and information sharing agreement within the EU.
Obviously these were just ideas but the strong message coming through was that the draft might not be appropriate (as in it is recognised that a one size fits all directive is not appropriate) and the need for proportionality needs to be recognised. J-PJ can see convergence between the UK and the French views (unfortunately there was no German representation).
