The European Union’s economic affairs and finance ministers holding informal talks in Brussels in a bid to break a fresh deadlock over the way the proposed AIFM Directive treats alternative investment managers and funds based outside the 27-member union.
According to media reports, France is now ready to block any proposal that would give non-EU funds a passport that would mean once approved in one EU country, the funds could be distributed freely in other member states in the same way as funds from managers based within the EU.
The UK has backed a proposal from the Belgian EU presidency that would give non-EU funds and managers passport rights if they accepted the same rules laid down by the directive for managers based in Europe. However, Germany is reported to back the French position.
There is speculation that in order to prevent the directive proposal being blocked altogether, member states might agree to delay the introduction of the passport or subject it to a review process at some point in the future.
If ministers and officials meeting in Brussels this week cannot reach agreement, it will threaten the current timetable for the directive, which is due to go before the European parliament for approval next month and slated to come into force next year or in 2012.
Since June representatives of the European Parliament, EU Council and European Commission have been holding so-called ‘trialogue’ discussions designed to reconcile different versions of the directive approved by the Parliament and Council in May.
One media report suggested that a trialogue meeting on Monday came close to an agreement on the final form of the directive before MEPs questioned a measure that would permit ‘passive marketing’, where sophisticated EU investors could invest in non-authorised foreign funds if they, rather than the fund manager, initiated the transaction.