HM Treasury has published the speech that Lord Myners, Financial Services Secretary to HM Treasury, gave at the FSA Asset Management Conference. Lord Myners’ speech covered the draft Directive on Alternative Investment Fund Managers.

Lord Myners begins his speech by stating that forming an effective EU single market in institutional investment funds would represent a major step forward for the EU and a major opportunity for the UK and EU funds industry. However, he also states that the many issues with the draft Directive are due to it not having gone through the usual process for new European legislation - a thorough impact assessment and proper consultation with stakeholders.

Lord Myners then discusses some of the ways the draft Directive could be improved in relation to:

  • Custody.
  • Third country aspects and marketing.
  • Portfolio company disclosure.
  • Leverage caps.
  • Capital requirements.

Lord Myners then spoke about the negotiating process that the draft Directive will go through. He mentioned that working groups of the Council of the European Union are discussing the draft Directive. In addition, the draft Directive is subject to the co-decision procedure. The European Parliament’s ECON Committee held its first discussion on the draft Directive in early September and the rapporteur, M. Jean Paul Gauzes, hopes to produce his draft report later in the year.

In his conclusion Lord Myners states:

"… it is clear to us all that the draft Directive will be amended before it is agreed. This is inevitable given the inadequate way in which it emerged. But let there be no doubt, there will be a Directive, the expectation in Brussels is now fixed on the need for legislation in this area."

View Lord Myners’ speech at FSA Asset Management Conference, 17 September 2009