Hedge Funds: Sharon calls for greater transparency, not over-regulation

12.45.56pm BST (GMT +0100) Wed 24th Sep 2008

The European Parliament is set to approve a report on hedge funds later today that, despite efforts from Socialist and Labour MEPs, will not introduce top-down regulation. Sharon, ALDE Shadow rapporteur, was instrumental in ensuring that the report urges more transparency and information on capital requirements, rather than singling out hedge funds and private equity specifically.

Commenting, Sharon said:

"It is important that the Parliament does not adopt a reactionary, knee jerk response to recent events. To target hedge funds and private equity specifically for regulation is not the right approach. Regulation must be non-discriminatory and must be part of a broader overall package of monitoring risk. A smart, forward looking approach is needed if we are to prevent not only the recent crisis but also any other potential mishaps. Voluntary codes have only very recently been adopted by hedge funds and must be given more time before we make any determinative judgements.

"The first draft of Mr Rasmussen's report was not acceptable to the majority of the parliament with its old school top down regulatory approach that would stifle any growth in the sector. Thankfully, many Liberal Democrat amendments that have softened the approach have been accepted and we can now look forward to the vast majority of the report to be included in the Commission's upcoming legislation on capital requirements and credit ratings agencies, expected next month.