March 26, 2020 / By mobanmarket
MEPs to vote on compromise deal with the CouncilParliament to vote on hedge-fund regulation
The European Parliament will hold a plenary session in Brussels next week at which the most important issue will be a vote to approve legislation on the regulation of hedge funds.
MEPs are being asked to approve a compromise deal that was struck between the Parliament’s negotiators and the member states on 26 October.
The legislation will require managers of hedge funds, private-equity funds and commodity funds to inform regulators and investors about their activities, to retain capital to protect themselves from default, and to use depository banks to safeguard their investors’ money. The managers will also have to obtain ‘passports’ if they wish to sell funds across the EU.
Jean-Paul Gauzès, a centre-right MEP from France who has drafted the Parliament’s response to the proposal, said that while the deal was not perfect it was still a “step forward” in controlling the European hedge-fund sector. The accord is likely to get the support of the Parliament’s two biggest groups, the centre-right European People’s Party (EPP) and the Socialists and Democrats (S&D). But the Greens say the new rules are too weak.
Pascal Canfin, a French Green MEP, said investors could take advantage of loopholes within the legislation that would allow them to sidestep the EU rules altogether by investing in non-EU based hedge funds.
MEPs will vote on the accord on Thursday (11 November). If approved, the regulation is expected to come into force in January, but member states will have two years to put it into national law.
Other items on the agenda of the two-day session, which begins on Wednesday (10 November), will be a report on the outcome of last week’s European Council (28-29 October).
The Parliament will also be asking representatives of the Council and the European Commission to help livestock farmers struggling to cope with rising cost of cereals for animal feed. World grain prices have risen in recent months to a two-year high.
A cross-party group of 25 MEPs has called on the Commission to release grain intervention stocks in the coming weeks and to consider extra aid for farmers, especially pork producers, which have been hit hardest.
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