20 OCT 2010
New hedge-fund and private-equity regulations were approved by European finance ministers on Tuesday after Britain backed down to give a Paris-based financial supervisor powers over a so-called "passport" system for non-EU fund managers.
By Bruno Waterfield, in Luxembourg | Telegraph
The British concession means the EU will abolish, by 2018, the current national private placement system, which allows hedge funds to apply to sell into EU markets on a country-by-country basis, something that industry had asked to retain indefinitely.
In its place and following a climb down by France will be a new "passport" giving hedge funds access to all markets across the EU's 27 member states in return for signing up to common rules that will be set by the incoming European Securities and Markets Authority (ESMA), which sets up in Paris as of January 2011.
Michel Barnier, the EU's internal market and financial services commissioner, said that he hoped the deal would pave the way for legislation to be quickly finalised in talks with the European Parliament over the coming weeks.
"All sides compromised, everyone came out with their heads held high," he said. "France finally accepted the passport. Britain accepted ESMA's supervisory role."
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