A draft of a proposed European Union directive would impose requirements to report risks, debts and trading activities to regulators, short selling limitations and capital requirements on "alternative investment fund managers" with significant assets under management.

The proposed directive would apply equally to hedge fund and private equity managers, as well as to those handling other vehicles such as commodity and real estate funds. The directive would only apply to managers with at least €250 million in assets under management.

The proposed directive would impose capital requirements on covered managers, although these appear to be lower than are required under current UK rules. It also includes reporting obligations, including a requirement that fund managers disclose overall leverage and sources of leverage. The draft also includes a ban on "naked" short selling.

Story: "'Alternative' Fund Managers Face Rule Change," Financial Times (April 4, 2009)

Story: "Hedge Fund Managers with Most Assets Face EU Rules," Bloomberg (April 9, 2009)