New EU Financial Market Reforms

European Parliament votes to reform hedge fund and private equity legislation

On 23 September 2008 the European Parliament called for strict new EU rules governing high-risk private equity and hedge fund activity, even though top regulators in the EU had said there were no plans to push forward extra legislation.

Currently, hedge funds and private equity funds in the EU are predominantly privately controlled, allowing them to take high risks and disclose relatively little information about their activities. However, the Parliament has endorsed a report by former Danish prime minister Poul Nyrup Rasmussen that called for action to:

• prevent unreasonable asset stripping of companies taken over by private investors, on the basis that employees of target companies should have the same rights under EU law regardless of whether private equity investors or hedge funds are the acquirer