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EU regulations to hit hedge funds

A raft of EU regulations which are set to become law could lead to compliance costs of around £1.2 billion for hedge funds in the first year. It is thought this could fall to around £1 billion the year for the industry in every subsequent year as the regulator gets tough with hedge funds, which many believe were one of the elements behind the collapse in the worldwide money markets.

Yet again, with London amongst one of the more favoured destinations for hedge fund operators, the EU is attempting to snatch power from the London markets and bring everything "in-house". Even though the industry itself is enormous, a £1.2 billion burden in year one and £1 billion a year subsequently will take some making up!

While hedge fund operators have expressed their concern and dismay at the new regulations, it seems as though nothing is going to stop the EU from taking over. There are accusations of using a sledgehammer to crack a nut but at this moment in time the EU regulators do not appear willing to compromise in any way regarding the new regulations.

Whether we see any form of legal challenge over the weeks and months ahead remains to be seen, but this is an issue which will cost jobs!

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