EU brushes off British concerns on hedge fund crackdown

Brussels: Britain's new coalition government made a limping start to its first innings in office after being brushed off by European Union finance ministers on the issue of stricter regulatory oversight for hedge funds and private equity groups. London, a preferred destination for hedge fund operatives, is not keen on enforcing strict controls on an industry that has traditionally shied away from regulation of any kind.

Under new draft rules the hedge fund industry's market plays, payment and borrowing mechanisms will come under enhanced scrutiny as such funds will have to disclose extensive information to regulatory bodies about their investment and market operations.

So far, such funds have operated in an intensely secretive manner remaining out of sight, and reach, of regulatory institutions of any kind. They have also been consistently accused of wreaking havoc on the financial markets through unrestrained bets on all kinds of market plays.

Under new rules hedge funds will come under the scanner of a pan-European regulatory body for the first time. The move comes even as nations around the world go about re-organising their domestic as well as the international financial sector in the aftermath of the global economic crisis.

Unabated financial speculation was also one of the reasons attributed to the meltdown in the global financial markets which sparked off a global recession in the period 2008-09.

"We are determined to accelerate the pace of regulation," Wolfgang Schaeuble, Germany's finance minister, told reporters after the meeting.