Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 95: To ask the Minister for Finance his views on the draft alternative investment fund managers and amending directives; if and when he intends to facilitate a Dáil Éireann discussion of this legislation; the contacts he has had from lobbyists in respect of this draft directive; and if he will make a statement on the matter. [45115/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

On April 30th last, the European Commission adopted a proposal for a Directive on Alternative Investment Fund Managers (AIFM). The proposal has been discussed at a number of meetings at Council Working group level since May and discussions are still taking place. It has not yet been discussed by the Ecofin Council. The proposal aims to put in place a regulatory regime for managers of all EU Alternative Investment Funds (AIF). The proposal is generally regarded as an attempt to regulate Hedge Funds, but it has a much wider scope than Hedge Funds and covers all collective investment funds. While certain types of funds, such as pension funds, are exempted, others, like private equity or venture capital funds, do fall within the scope of the proposal.

As part of the proposal, AIF managers could avail of an EU passport to market funds on a cross-border basis within the EU. Such a passport could also be provided to non-EU funds in situations where those funds are domiciled in jurisdictions that are regarded as having equivalent supervisory regimes. While the proposed passport regime within the EU is restricted to professional investors (although Member States would be permitted to allow access for retail investors) the proposal does provide a number of investor protection measures. The proposal also envisages a range of powers for national competent authorities and provides for the effective exchange of information between regulators.

In view of the potential impact on the funds industry in Ireland, my Department has been in regular contact with a range of interested parties, including the Irish Funds Industry Association, the Irish Association of Investment Managers, the National Treasury Management Agency, the Irish Stock Exchange, the IDA and the Financial Regulator. These contacts have highlighted a number of areas where the Commission's proposal could be improved. The area of most concern for stakeholders is in relation to the scope of the proposal. A number of issues arise in relation to the definition of who exactly is the AIFM. The Irish delegation is working closely with the Swedish Presidency, the Commission and other Member States in an effort to achieve greater clarity on this crucial issue.

An Information Note was sent to the Joint Committee on European Scrutiny on 29th May last. The Committee held a public meeting on 14th July which was attended by my officials, accompanied by representatives from the Financial Regulator and the Irish Funds Industry Association. The Committee's Report of that meeting was published on 25th September. The Committee's Report highlighted seven issues which required further clarification or amendment and I was asked to bear these considerations in mind before adopting a final position on the proposal. My officials and the Financial Regulator have strongly pursued these particular issues, as well as others that arose, and, while a lot of clarification has been received, there are still some issues to be dealt with.

The Swedish Presidency is working very hard with Member States and the Commission in an effort to agree a general approach by Council prior to entering into formal negotiations with the European Parliament under the co-decision process. In light of the foregoing and, as this issue has already been subject to the Oireachtas scrutiny process, I do not believe that a further Dáil Eireann discussion on this matter is necessary at this time.