Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 86: To ask the Minister for Finance, further to Parliamentary Questions Nos. 45 and 46 of 9 June 2010, if he will oppose any alterations to the Council's test on Article 35 of the alternative investment fund managers directive; if he will declare his opposition to the European Parliament's amendment proposals in respect of Article 5 of the AIFM directive; if he will declare his opposition to any amendment to the IFM directive which will force non-EU funds operating in the EU market to have their headquarters in the EU; and if he will make a statement on the matter. [27053/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As I have mentioned in replies to several previous PQs from the Deputy and others, the third country provisions of the proposed Directive were the most contentious issues of the negotiations. I have also stated that the agreement on a general approach which was reached recently at Ecofin, represented a balanced, workable approach. I still believe that the Council's text on Article 35 represents the best solution on this difficult issue. However, as negotiations with the European Parliament are continuing under the co-decision process, I can not rule out the possibility of any further alterations to Article 35. My preference would be to maintain the text agreed in the Council general approach.

The Deputy once again refers to Article 5 of the proposed Directive. In my reply on 9 June I had assumed that he was referring to Article 35. Article 5 is a technical provision which sets down the procedure for granting authorisation to all EU managers of alternative funds. As I noted in my earlier reply, this Article does not refer to non-EU managers. In substance there is not much difference between the approaches being adopted by the Council and the European Parliament on this issue.

The proposed Directive deals with the managers of alternative funds, rather than, as the Deputy suggests, the funds themselves. The extent to which agreement can be reached between the institutions on the treatment of non-EU managers will be crucial in determining the success of the new regime. There are indications that agreement on an appropriate approach will probably be the most difficult issue in the negotiations with the European Parliament and will only be possible in the context of an overall global compromise.