Fund Managers get a lesson in Brussels policymaking
Yesterday’s vote in the European Parliament on the Alternative Investment Fund Managers (AIFM) Directive represents a political consensus on one of the most contentious legislative proposals in recent times. The Directive will bring in tighter regulation for hedge funds and private equity, introducing new rules on reporting, registration, capital requirements and investor protection measures. While industry may not be gushing with praise for the final result, it has certainly taken the edge off some of the more extreme aspects of the original text.
The Directive shows what a delicate balancing-act European policymaking can be and highlights the challenges that any major industry can face in attempting to lobby in Brussels. What lessons can be learned from the last two years of lobbying?
• Engage early – the AIFM Directive followed reports by two MEPs which laid the ground work of the debate, particularly setting out the stall of the Left to regulate industry.
• Bring something positive to the table – policymaking in Brussels is based on compromise; public complaints of over-regulation by industry will not be effective if they do not come in parallel with sensible debate over acceptable concessions.
• Build alliances – arguments well be much better received by stakeholders who can demonstrate support from other Member States and other groups. In the case of AIFM, industry could have been much quicker in showcasing the impact of overregulation on pension funds.
• Get your national policymakers on side – for a Directive that will have an impact on London more than any other European city, UK Treasury needed to be on message and lobbying hard for the City. As the Tories pointed out in Opposition, HMT took their eye off the ball; industry needs to give national authorities the necessary weapons with which to fight in Brussels.
Michael Cooper
Senior Consultant
November 12 2010