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The so-called Alternative Investment Fund Managers Directive would regulate private equity and hedge funds as well as various other “alternative” funds – such as for commodities, real estate and infrastructure.
Core measures include requiring fund managers to obtain authorisation before they operate in the EU; satisfying authorities about their internal risk management arrangements; providing certain information to investors; rules on leverage and custodial standards; and rules for offshore funds and managers located in so-called third countries.
The directive must be approved by member states and by the European parliament before it can become law.
The European Commission says the AIF sector in the EU managed about €2,000bn ($2,720bn, £1,900bn) in assets at the end of 2008.