Eleven European Union nations including Germany, Sweden and the U.K. are calling for the bloc to change a deal to toughen rules for fund managers, potentially delaying the measures.
The countries, which also include the Czech Republic, Austria and Ireland, are seeking to scrap a cut-off date for choosing how to implement penalties and to alter guidelines on how to apply pay curbs, according to a copy of their joint note obtained by Bloomberg News. They are also seeking to delete provisions handing the European Securities and Markets Authority a bigger role in handling whistle blowers who give information about rule violations.
“Making these alterations would smooth the adoption process” of the law, according to the note. This would increase “the chances of reaching a deal in good time.”
European Parliament lawmakers and Greece, which holds the rotating presidency of the EU, agreed on the measures for funds known as UCITS, or Undertakings for Collective Investment in Transferable Securities, on Feb 25. The toughened requirements include a stricter rules for protecting fund assets and curbs that ban guaranteed bonuses and require deferral of some awards.
“I am ready to discuss technical changes to the text but not to open up loopholes in the rules we have agreed,” Sven Giegold, the parliament’s lead negotiator on the draft law, said in an interview.
While the guidance on pay could be adjusted to make sure it only covers risk takers, there’s a need to ensure that companies can’t simply escape the rule by moving their activities overseas, Giegold said.
There is also a risk that changes sought by nations to the sanctions rules could allow them an escape route from common EU standards, he said.
A spokesman for Greece’s EU presidency declined to immediately comment. A final deal would need to be endorsed by the European Parliament and governments before it can take effect. The Financial Times reported on the note on Tuesday.