UNI says EU private equity, hedge fund regulation plan must go further
UNI says EU private equity, hedge fund regulation plan must go further
UNI Global Union today warned that the European Commission’s plan for private equity and hedge fund regulation does not go far enough to address the regulatory concerns over these powerful financial players and that the narrow scope of the directive will make it too easy for firms to avoid its application.
“At last private equity and hedge funds are on the regulatory agenda in Europe and globally as a result of the G20 summit,” said UNI General Secretary Philip Jennings. “With this law it will still be difficult for unions and workers in private equity owned companies to obtain a clear picture of the financial arrangements and transfers in place. The financial world of hedge funds and private equity is murky. We need to know more about leverage, fees, management practices, and responsibilities to those employed.”
Jennings says governments must learn the lessons of the financial crisis, where light touch regulation has lead to global economic catastrophe. The EU can and must do better that this.
“The people of Europe have financed a massive bailout of financial institutions. They don’t want to be fooled again,” Jennings said.
UNI believes the draft directive is weak and it will now be working with the European union movement and European Parliament to improve the text.
The proposed directive will be put to vote among EU states and the European Parliament. It is expected that the draft text by EU Internal Market Commissioner Charlie McCreevy will be changed through this next process.
The regulation needs to be strengthened and then must be adopted internationally, UNI said.
“There is a danger here that investors will place funds outside of Europe, unless the international regulatory regime puts something similar in place. It is in no one's interest to drive investment away from Europe,” warned Bernadette Segol, regional secretary of UNI Europa.
On Wednesday, the European Commission published its recommendation to the European Parliament (EP) on regulating alternative assets. After many months and numerous consultations, the proposed legislation is inconsistent and full of holes. It is unclear what will actually be achieved for anyone in this proposal.
UNI is very concerned that the plan will do nothing to address the concerns of workers, who are often the victims of financial manipulation that takes place behind closed doors.
“KKR, the biggest buyout fund in the US, last week asked investors to help with a 730 million Euro bail out to save their struggling European portfolio companies such as Alliance Boots in the UK and ProSeiben Sat 1. in Germany,” Jennings said. How does this directive stop this sort of disaster from happening again in Europe?”
Alliance Boots employs over 100,000 employees and ProSeiben Sat1. over 5500 staff.