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Among others, the draft report calls for new regulation for the hedge funds and private equity industries and makes recommendations to improve financial stability, increase transparency in the financial markets, and deal with issues of conflicts of interest.



On private equity and hedge funds, the report calls for:

- the establishment of EU-wide registration and authorisation of hedge fund and private equity managers;

- the definition of appropriate level of debt for private equity and hedge funds in relation to the target company, including by eliminating tax-distortive regulations (e.g. by eliminating tax deductibility of interest payments on the debt concerned);

- the definition of an upper limit in the debt of hedge funds;

- the extension of existing EU regulation on information, consultation and continuing of employment conditions of workers to private equity; and

- measures to prevent conflicts of interest in private equity takeovers by enforcing disclosure of fees and other incentives received by the target company’s directors.



In terms of financial stability, the report also asks regulators to establish:

- an EU Public Credit Rating Agency with the aim of increasing competition and improving transparency in the industry;

- a European supervisor covering all financial services sectors (capital markets, securities, insurance and banking sectors); and

- a public register of structured products in the EU.



UNI Finance welcomes this initiative, which recommendations go further than any proposals made by regulators so far. In addition, these address most demands of UNI-Europa Finance on regulation of financial markets. A statement on this was adopted in May 2008 by UNI-Europa Finance affiliates and is available here.



The draft report , prepared by MEP Poul Nyrup Rasmussen, requests the Commission to submit to Parliament by 30 November 2008 a legislative proposal or proposals on hedge funds, private equity and other relevant actors. It is scheduled to be adopted in theEP's Economic and Monetary Affairs Committee on 10 September 2008.





The draft report is available here:









TUAC and the ETUC have also released a joint statement on this: