Adoption of the Directive ISA, Was it a compromise? Part.I

Proposed by the European Commission in April 2009, Directive ISA on hedge funds (Alternative Investment Fund Managers) was passed overwhelmingly by Parliament 11 November 2010.

The draft Directive is that born of the political will to increase the transparency and regulation of the financial sector following the 2008 crisis.

In this general hedge funds have been pilloried particularly because of their opacity and systemic risks they might pose to financial markets and on whole sectors of the economy. Designated block, the funds "alternative" yet includes wide range of industries: venture capital, buyout capital, real estate funds and hedge funds, which had all the complicated drafting of common rules in these sectors. The main projects of the Directive focused on reducing systemic risk, on increasing the power of supervisory authorities on the improvement of investor protection on earnings and on the development of a European regulated alternative management.

Lengthy discussions on this Directive have been intense lobbying by supporters of the status quo countries (UK, Ireland ...) and those advocating stronger regulation of the financial system (France, Germany, ...). Michel Barnier, European Commissioner for Internal Market and Services, has spent all his diplomacy to bring together the viewpoints around a unifying text; But at what price?


The treatment of third countries was one of the blocking points of discussion in the Council of the European Union given its potential impact in London, second in from hedge funds, representing one trillion Euros of Assets under management at end 2008.

Time mentioned, a simple refusal of the marketing of hedge funds not registered in Europe would have a major impact on the industry with approximately 60% of hedge funds are domiciled in countries offshore cons less than 5% in Europe.