We strongly hope that the rules you put in place will ensure that non-EU fund managers and global custodian banks have the same access as their EU counterparts.
One potential solution that has been tabled by industry insiders would be to allow non-EU fund managers to market in individual EU member states by complying with the existing system of national private placement regimes until the manager is able to establish the equivalence of its home regime.
The comments prompted Barnier to say via a spokesman that the pending legislation is in line with G-20 proposals.
According to a Financial Times report on Friday, French President Nicholas Sarkozy and British Prime Minster Gordon Brown shared Geithner's concerns and planned to meet on the issue to discuss solutions.
If adopted in its current form, AIFs in developing countries could lose access to funding from the EU market, and EU investors, including EU member development banks, would be limited in their ability to promote private sector growth in the world’s poorest countries.
The Institutional Limited Partners Association (ILPA) – whose roughly 220 members control the vast majority of commitments to private equity funds across the world – also sent a four-page letter to Barnier, describing how the diminished access to capital for EU companies will harm European private equity.
The Emerging Markets Private Equity Association (EMPEA) has written similar letters to the European Commission, the European Parliament and the Spanish presidency, expressing “profound concern” about the third country rules.
“If adopted in its current form, AIFs in developing countries could lose access to funding from the EU market, and EU investors, including EU member development banks, would be limited in their ability to promote private sector growth in the world’s poorest countries,” Sarah Alexander, EMPEA CEO, wrote to Spanish Minister Elena Salgado Mendez. “The third country and equivalency provisions contained in the draft directive would make it either legally impossible or cost-prohibitive for emerging markets fund managers to raise capital in various EU
markets, jeopardising their ability to raise sufficient funds for investment and therefore to be viable as
going concerns.” EMPEA estimated that more than 90 percent of its members market funds to the EU or have European LPs.