On July 30, the Treasury Select Committee of the UK House of Commons published a report following its hearings on the UK private equity industry. In its report, the Committee recommended that the tax regime in respect of debt versus equity arrangements should be reviewed, particularly the treatment of carried interests and the application of residence and domicile rules. The Committee also called for a clarification from the UK Government on the application of the UK's Transfer of Undertakings (Protection of Employment) Regulations to take-overs and the continued monitoring of the risks posed by high leverage and the use of covenant-lite loans.

The Committee's report strongly supported the work of Sir David Walker's group on a code of conduct for the UK private equity industry, covered in the July 20, 2007 edition of Corporate and Financial Weekly Digest, and the work of the UK Financial Services Authority on market abuse and the prevention of conflicts of interest.

http://www.publications.parliament.uk/pa/cm200607/cmselect/cmtreasy/567/56702.htm