EU AIFM - Update No. 11

By now you will be aware of the decision to remove discussion of the AIFM Directive from the agenda of the meeting of EU finance ministers (ECOFIN) on Tuesday this week (16 March) after Gordon Brown's direct intervention . The last minute decision to remove the debate was unforeseen, but positive, as it was widely anticipated that during their meeting ECOFIN would have agreed a compromise text of the Directive which would be deeply damaging to the UK's interests and, in particular to the private equity and venture capital industry.  

There is still a very long way to go and we must continue to make the case for proportionate and appropriate regulation, rather than what had been proposed. As Lord Myners told the BVCA at our breakfast meeting last week, nobody is going to get exactly the Directive they want. But it is vital that the European regulatory regime is not protectionist in tone, and does not rein in the ability of the private equity and venture capital industry to contribute to economic recovery.  Discussion of the Directive by finance ministers will now move to the next ECOFIN meeting scheduled for June. The Spanish Presidency has indicated that it would like the issue to be resolved within its Presidency which concludes at the end of June.

Attention now focuses on the European Parliament and the Economic and Monetary Affairs Committee (ECON) which debated proposed amendments to the Directive on Wednesday 17 March. It was evident during this debate that ECON intends to take a final vote on the Directive on 12 April to strengthen its hand in its negotiations with the Council of Ministers. In advance of Wednesday's ECON debate, the Committee's appointed rapporteur, Jean-Paul Gauzès, tabled a number of compromise amendments which reflect a further shift in his thinking on key areas such as proportionality, equivalence and the proposal for a five year transition period to a third country regime. While these compromise amendments offer room for the BVCA and our European counterparts to build favourable agreements, there remain no grounds for complacency and much still needs to be done. Wednesday's debate also highlighted the strong divergence of views which exists within the Committee with many continuing to argue for a tougher regime.  The BVCA continues to work with UK MEPs on the issues of greatest concern to Britain and to contribute constructively to the compromise agreement process.  Our colleagues in EVCA have been campaigning vigorously across Europe reflecting the fact that it is the whole of the European economy, not just the UK, which will be damaged by inappropriate regulation.

Stay up to date with the BVCA campaign on the AIFM Directive at www.bvca.co.uk/in-europe.