Following a report issued by the House of Lords European Union committee warning Britain to withhold its consent to European Union rules regulating the hedge fund and private equity industries or else risk the UK and EU economies becoming ‘seriously damaged’, Mark Spinner, partner and head of private equity at international law firm Eversheds comments:

“The draft AIFM regulations have been the focus of much attention over the last 6 months or so and they have been universally disliked by the private equity industry. The Spanish presidency has produced a reworked text, with a full redraft of the Directive due for when EU Finance Ministers meet in March, although this appears to be an ambitious timeline. Member states remain divided over key areas of the text. In the UK, the ECON Committee (the main parliamentary group assessing the text) have put forward 1,300 suggested changes which represents an unprecedented number for EU financial services legislation and reflects the strength of feeling on the issue and is, perhaps, indicative of the haste in which the draft regulations were introduced. The BVCA has most recently focused its attention on the portfolio company disclosure requirements, which it believes should be consistent with national company law. Without significant movement on the text I believe the UK government should resist adoption and if necessary look to block, since in its current format the AIFM regulations will put the UK and Europe at a significant disadvantage and make it much less attractive as a base for private equity investors.”