04/03/2010 Author: Tony Griffiths

Spain acknowledges lack of Directive consensus

Industry lobbyists received a boost last week as Spain admitted opinion over its hard-lined new drafts of the Alternative Investment Fund Managers (AIFM) Directive remains split.

EU Council president Spain, which has redrafted the Directive three times since 1 February, has been criticised by members of the alternatives industry for toughening the Council’s stance on a number of issues, particularly third-country marketing.

In a note released on 26 February, however, Spain announced that among member states “there was not yet a qualified majority supporting an overall compromise”, mainly because of disagreement over three key topics – scope, depositories and third-country issues.   

Spain’s recent decision to reinstate provisions that could restrict non-EU funds from accessing EU investors had been branded “protectionist” by industry trade body the Alternative Investment Management Association (Aima), and “deeply disturbing” by the Investment Managers Association (Ima), with the move widely regarded as a setback for lobbying efforts.

Concerns mounted after Spain secured a negotiating mandate, allowing it to reach a compromise on its draft via a qualified majority, rather than a unanimous decision. “A sign of the speed they want to push it through”, Aima chief executive Andrew Baker, said.

Last week’s announcement, however, suggests that the stance taken by the UK – the hedge fund industry’s most high-profile anti-AIFM lobbyist – continues to attract significant support, while the recent toughening of the AIFM Directive does not have the backing of the Council. Nordic and eastern European states are believed to be among the UK’s main supporters.

The general belief that EU negotiators are increasingly keen to finalise the AIFM document was also supported by the conclusion of last week’s note, with a recommendation to the Council, regardless of the stalemate, to “invite the Presidency [Spain] to start negotiations with the European Parliament… with a view to reaching an agreement at first reading.”

“There is now a desire to complete this under Spain,” said Aima’s Baker. “This means there could be concessions, but at the likely price of clarity.”